Annual Report 2006 Annual Report 2006 Aker Yards Employees at the Saint-Nazaire Ship- Yard in France — Skilled Shipbuilding Professionals

Annual Report 2006 Annual report 2006 Aker Yards employees at the Saint-Nazaire shipyard in France — skilled shipbuilding professionals

● Aker is an active industrial owner ● Aker companies have a total of 55,000 employees in 45 countries ● Total 2006 revenues: NOK 80 billion ● Main focus: Energy, maritime and marine-resoures industries People make Aker what it is … as they have for three centuries

A tradition of innovation Aker is a skilled, active developer of world-class industries, with 55,000 employees on five continents, and operating revenues of NOK 80 billion. Aker has a tradition for innovation — stretching vessel gear, and construction materials, and all the way back to the industrial revolution in built ships. The focus on transportation included Great Britain and the Nordic countries. Aker was deliveries of components to ever-larger vessels founded in 1841, but several of its business ac- for international commerce. Our workshops tivities have roots that date back to the 1700s. were recognized wellsprings of innovation. Initially, these businesses developed and built In recent decades, Aker has strengthened machinery components and equipment needed its position as the preferred partner of leading to develop the iron, metals, and shipping indus- oil and gas companies, a wide range of industries of their day. tries, and shipowners. Aker’s heritage is the In the heyday of steam power, Aker’s pre- people who were always willing to take on chal- decessors delivered machinery to pioneers in lenges and to deliver industrial solutions. Aker’s the developing timber, lumber, paper, and coal generations of dedication and know-how, com- industries as well as hydropower turbines. They bined with today’s technologies and tools, yield also manufactured ships’ equipment, fishing tomorrow’s products, services, and solutions.

Aker — an overview

Aker ASA Active industrial owner – further develops and strengthens Aker companies

Aker Kværner Aker Floating Production Globally leading supplier – energy, oil, Oil production ships – unique solutions gas, and process solutions for FPSO floating production

Aker Yards Aker American Shipping World leader in specialized vessels – USA specialist – builds, owns, and Europe’s largest shipbuilder, with 17 yards charters merchant vessels in the USA in seven countries Aker Material Handling Aker Seafoods Leading European innovator – office, Spans the entire value chain – from archive, and warehouse storage solutions harvesting and processing to European consumers Aker Exploration Focused targeting – enters partnerships Aker BioMarine that find and produce oil and gas on the Healthy ingredients – develops omega-3 Norwegian continental shelf products from krill Aker Capital Aker Drilling Investments – incubator and financier for Modern rigs – has the world’s two most new companies advanced offshore drilling units under construction People make Aker what it is … as they have for three centuries This is Aker

Aker is an active, industrial ownership company. Aker companies share a common set of values and long traditions of active industrial development.

Aker creates value for all stakeholders by building and further develo- They are noted for the way they work closely with their customers, ping world-class businesses in industrial sectors in which Aker com- cooperation partners, and suppliers worldwide. panies possess know-how, state-of-the-art expertise, and strong execution capabilities. Aker is an industrial incubator, launching new companies that have Shareholders grown out of current business activities and developed from syner- Since Aker was listed on the Oslo Stock Exchange on 8 September gies among these activities. Aker companies develop through opera- 2004, the company has created significant value for shareholders. As tional improvement, organic growth, and acquisitions. Although Aker of 31 December 2006, the company had 17,308 shareholders. develops its companies as though they are to be owned indefinitely, Kjell Inge Røkke is Aker’s main shareholder; through his privately- its long-term perspective does not prevent Aker from divesting inte- held company TRG he owns 67.8 percent of Aker ASA shares. rests or selling companies when these businesses can better advanced under other owners.

Size With a total of 55,000 employees in 45 countries and revenues of NOK 80 billion, Aker companies are significant industrial participants in many communities. The value of Aker’s listed shareholdings increased from NOK 19 billion to NOK 36 billion in 2006.

Markets and customers Aker companies deliver technology-based products and services, and advanced, integrated solutions and niche projects to customers in oil, gas, energy, and process industries. Aker companies also include a major shipbuilder and a significant fisheries industry participant. Aker’s core businesses are leaders in their respective industries.

History – long traditions

Establ. Peter Steenstrup Kjell I. Røkke

Norcem (offshore, cement) Aker Kværner Aker Yards J M Johansen (fisheries) Aker Seafoods RGI Aker Am. Shipping Aker Matr. Handl. Davy/John Brown/Trafalgar Aker Drilling Aker Floating Prod. Oluf A. Onsum, founder Kværner Aker Biomarine Aker Exploration Masa-Yards Aker Capital

1850 1900 1950 2000 Abaout us

2006

Contents 2006 Key events

About us and our goals ● Another excellent year 7 Key figures 2006 Aker continued to grow and develop in 2006. Revenues for 2006 for Aker 8 Our values Group companies amounted to NOK 80 billion, up 38 percent compared 10 Letter from the CEO with 2005, and 2006 operating profit (EBITDA) was NOK 4.3 billion, up 43 percent from 2005. At year-end 2006, the order backlog stood at NOK 144 Our business billion, up NOK 50 billion compared with 31 December 2005. 12 Business areas 14 Aker Kværner ● Active value creatioon 18 Aker Drilling The parent company Aker ASA, actively creates added value. The estab- 20 Aker Floating Production lishment of Aker Floating Production, Aker BioMarine, and Aker Explora- 22 Aker Exploration tion generated revenues of approximately NOK 4.6 billion in 2006. 24 Aker Yards 28 Aker American Shipping ● New company on the Oslo Stock Exchange 30 Aker BioMarine Aker Floating Production was listed on the Oslo Stock Exchange in June 32 Aker Seafoods 2006 following a USD 150 million share issue. Prior to the share issue, the 34 Aker Material Handling market had priced Aker’s ownership interest in Aker Floating Production at approximately NOK 800 million. Aker Floating Production owns, operates, 36 Aker Capital and charters ships for production and storage of oil and gas. 38 Health, safety and environment 39 Human Resources ● Targeting krill 40 Corporate responsibility Aker BioMarine completed a NOK 1.2 billion share issue, Aker’s 76.2 per- Our performance cent ownership stake in Aker BioMarine was valued at NOK 3.9 billion. Aker BioMarine combines Aker’s long-term international fisheries activities 42 Board of Directors’ report and deepwater marine harvesting know-how with state-of-the-art biotech- 46 Annual accounts nology. Aker BioMarine will apply for listing on the Oslo Stock Exchange in 48 Annual accounts Aker group the first half of 2007. 96 Annual accounts Aker ASA 110 Annual accounts Aker ASA and Holding ● Ready for oil exploration

117 Shareholder information Aker Exploration raised NOK 1.37 billion in new equity and convertible bonds. Aker’s ownership stake in Aker Exploration was valued at NOK 305 Organisation and governance million prior to the share issue. Aker holds 49.9 percent of Aker Explora- 120 Corporate governance tion shares. The offshore exploration company is ready to help discover 122 Board of Directors new oil and gas reserves on the Norwegian continental shelf. It has chartered one of Aker Drilling’s ultra-modern drilling platforms and has ow- 124 Management nership stakes in offshore licenses. Aker Exploration will apply for listing 125 Addresses on the Oslo Stock Exchange in the first half of 2007

Financial calender 2007

29. March Annual General Meeting 8. May Interim report, Q1 2007 14. August Interim report, Q2 2007 5. November Interim report, Q3 2007

Aker – solving tough problems since 1841.

Aker ASA annual report 2006 About us

2006

Key figures Aker

Key operational figures 2004 1) 2005 2006 Order backlog 31.12 56 109 93 552 143 590 Order intake 55 964 85 412 111 833 Operating revenues 46 826 57 927 79 892 EBITDA 1 965 2 993 4 280 EBITDA margin 4.2 5.2 5.4 Profit for the year -69 2 590 3 942

Cash flow Cash flow from operating activities 4 921 3 632 4 337

Balance sheet Interest bearing liabilities 8 563 12 659 18 595 Equity ratio 23.4 26.1 27.6

Share data Share price 31.12 62 198 401 Dividend per share (paid) - 14.0 6.5

Employees Number of own employees per 31.12 (not including agency personnel) 35 816 36 937 46 255

HSE Sick leave 3.5 3.8 3.2

1) Proforma Profit and loss figures

Operating revenues EBITDA Order intake Order backlog NOK million NOK million NOK million NOK million

80 000 5 000 120 000 160 000 70 000 4 000 60 000 90 000 120 000

50 000 3 000 40 000 60 000 80 000 30 000 2 000 20 000 30 000 40 000 1 000 10 000 0 0 0 0 2004 2005 2006 2004 2005 2006 2004 2005 2006 2004 2005 2006

Aker ASA annual report 2006 About us

Our values

Unity and commitment

Aker’s success is built on our six core values. Our employees’ dedication and know-how allow Aker companies to deliver on their promises.

Aker companies share a common set of va- “speak the same language” cooperate more lues, which both unite us and affirm our com- easily. Thus, we use a system that weaves mitment. values into procedures and guidelines at all Our shared values have a long tradition. group levels. Leadership evaluation assess- They originated among the Aker companies, ments and analytical tools, as well as one-on- and have steadily evolved over time, always one employee evaluations, help keep our cor- reflecting the work of the generations at Aker. porate culture vibrant. Although the companies that comprise Aker generally engage in distinctly different Common goals businesses, they share many common cultu- Values that do not support day-to-day priori- ral features. Aker’s six core values (see below) ties and decision-making are of little worth. are the nucleus of comprehensive, long-term Acting in accordance with our corporate va- efforts that ensure the companies’ vitality lues promotes sound actions and reinforces under tomorrow’s conditions. How the various Aker’s long-term relations with its many and Aker companies achieve their growth and pro- varied stakeholders. fitability is no less important than the achieve- Efforts to build a corporate culture that ments themselves. reflects our common values are ongoing. An effective, pervasive culture must be dynamic. Business cooperation Thus, it is with a combination of humility and The extensive business development and co- pragmatism that Aker works to strengthen and operation that takes place across organizati- cultivate the Aker group’s values. Solid values onal borders in Aker today necessitates the are the foundation that enables Aker to achieve development of common values. People who sustainable, long-term industrial development.

HSE mindset We take personal responsibility for HSE because we care

Delivering results We deliver consistently and strive to beat our goals

Customer drive Building customer trust is key to our business

People and teams All our major achievements are team efforts

Hands-on management We know our business and get things done

Open and direct dialogue We encourage early and honest communication

Aker ASA annual report 2006 About us

Although the companies that comprise Aker generally engage in distinctly different businesses, they share many common cultural features

Aker ASA annual report 2006 About us

A word from CEO

Leif-Arne Langøy, Aker’s President and CEO and Board Chairman. Photo: Rolf Jarle Ødegaard/SCANPIX

10 Aker ASA annual report 2006 About us

Innovation and value creation

Broad-based advances, greater robustness, and more predictability for value creation and dividends: A bold but accurate summary of Aker in 2006.

In 2006, the value of the Aker share, inclu- because investors are unwilling to pay “full lished in the fall of 2004, we have introdu- ding dividends, increased by 99 percent – an market price” for the investments, due to their ced no fewer than four new companies to the excellent year’s growth, considerably above risk profile. stock market. At least two additional compa- overall share-price growth on the Oslo Stock However, Aker is not a typical holding com- nies will be listed in 2007. Exchange and far beyond average share- pany that eats into the value creation it is man- Aker’s unique combination of an industrial price growth on the world’s leading exchan- dated to build. We generate added value that platform, technologies, and access to finan- ges. far exceeds our own costs. cial resources and innovative capabilities is In the relatively brief time since Aker’s an excellent foundation for further value crea- stock-exchange listing in the fall of 2004, Low costs, high yields tion. We will continue to challenge our Aker Aker’s value has increased more than seven- Aker ASA and Holding companies had ope- companies to innovate and develop optimally. fold. The market capitalization of our share- rating costs of NOK 131 million in 2006. The Aker, as a recognized industrial powerho- holdings in exchange-listed Aker companies, same year, the company realized NOK 4.6 bil- use and leading international brand, will be plus dividend payments, increased over the lion in gains associated with companies Aker further strengthened. same period from NOK 5 billion to NOK 37.7 initiated and developed that went public: Aker An important aspect of our follow-up of billion. BioMarine, Aker Floating Production, and companies takes place in the Board room. The Rising share prices in confident stock Aker Exploration. Similarly, in 2005, Aker ASA various Aker-companies have extremely com- markets partly explains this growth. Strong – the parent company of the Aker Group – har- petent boards of directors that act with inte- markets in the shipbuilding, oil, gas, energy, vested gains of NOK 1.6 billion from the de- grity; most shareholder-elected board mem- and processing industries are other drivers. velopment of new companies and projects. bers are independent of Aker. The expertise However, the market cap growth tells another Aker’s in-house generated value creation and diversity of board members bring per- story: that Aker’s exceptional development over the past couple of years is thus many, spectives and insights that are invaluable to is due to high-caliber, focused work at each many times higher than the costs of opera- the development of their companies – and for Aker-company to implement improvements, ting the parent company. This proves that Aker Aker as a whole. spur innovation, sharpen business develop- adds value far beyond both the company’s Aker’s financial position has been signifi- ment, and strengthen customer relations. operating expenses and the value growth of cantly strengthened in recent years. We have its industrial-ownership interests. freed up liquidity, strengthened our balance Shares at a discount You have my pledge that I will further sheet, and increased our financial clout. We There is a “but.” Financial market participants develop Aker ASA’s ability to incubate new offer our company’s shareholders predic- price Aker far below the sum total of the mar- companies, build existing businesses, and tability as to future dividends in line with our ket capitalization of our shareholdings in Aker rebalance its portfolio of ownership interests established dividend policy, and we have built Kværner, Aker Drilling, Aker Floating Pro- through corporate divestitures and acquisi- the foundation for further industrial moves and duction, Aker Exploration, Aker Yards, Aker tions. value creation. American Shipping, Aker BioMarine, and Aker As a fellow shareholder, Board Chair- Seafoods. Create, develop, launch man and CEO I extend my heartfelt thanks In other words; the Aker share trades at As this annual report goes to print, our wholly to Aker’s board members, management, and a discount. As of early 2007, this discount owned subsidiary, Aker Capital, is receiving employees for their dedication and achieve- was approximately NOK 59 per share rela- further resources and capital that it will use ments and excellent cooperation. 2006 was tive to the value-adjusted equity that reflects to grow new companies into profitable bu- another good year for Aker, and 2007 promi- the quoted price of these companies and sinesses. Together with Aker Kværner and ses to follow suit. the market capitalization of Aker’s industrial Aker Yards, we have established Aker Inno- ownership interest in them. vation and Aker Equity Fund. To these dyna- It is not unusual that shares in holding com- mic organizations, we will add our expertise, panies are valued below their value-adjusted technologies, solutions, and financial clout to equity – generally because the expenses of create and develop new first-rate companies. Leif-Arne Langøy the holding are eating into value creation, or Since Aker’s present structure was estab- Board Chairman and CEO

Aker ASA annual report 2006 11 Our business

Business areas

Committed people create the technology, products, and solutions delivered by Aker companies

12 Aker ASA annual report 2006 Our business

Aker Kværner Aker Yards

Globally leading provider of en- World leader in specialized ves- gineering and construction serv- sels in the market segments ices, technology products and cruise ships and ferries, mer- integrated solutions for the en- chant vessels, and offshore and ergy sector and other industries. specialized vessels.

Page 14 – 17 Page 24 – 27

Aker Drilling Aker American

International drilling rig company Shipping with two sixth-generation semis- ubmersible drilling platforms un- Builds, owns, and charters ships der construction — developed to in the United States. The Philadel- operate safely and efficiently. phia shipyard is an ultra-modern yard, building containerships and product tankers. Page 18 – 19 Page 28 – 29

Aker Floating Aker BioMarine

Production International marine ingredients company that develops, pro- Owns, operates, and charters duces, and markets Omega 3- vessels for oil and gas produc- based products from krill. tion and storage. Unique Aker Smart solution for FPSO vessels.

Page 20 – 21 Page 30 – 31

Aker Exploration Aker Seafoods

Streamlined exploration com- Internationally leading seafood pany operating on the Nor- company — across the entire wegian continental shelf. Of- value chain: from harvesting of fers a unique rig-for-oil solution white fish, through processing, - searching for new oil and gas to sales to consumers. resources.

Page 22 – 23 Page 32 – 33

Aker Material Aker Capital

Handling Equity investments and developing new companies. Its purpose One of Europe’s leading produc- is to actively create significant ers and suppliers of storage and added value for shareholders. logistics solutions for archives, offices, and storage facilities.

Page 34 – 35 Page 36 – 37

Aker ASA annual report 2006 13 Our business

Aker Kværner

Aker Kværner delivers robust solutions - offshore and onshore

14 Aker ASA annual report 2006 Our business

Growth continues Aker Kværner continues to advance. Favorable markets and solid operations resulted in profitable growth in 2006. The year-end 2006 order backlog is a record high.

Aker Kværner is a leading global supplier of Gulf of Mexico, the Kashagan project, and the engineering services and construction, tech- Adriatic LNG regasification terminal. nology products, and total solutions for the Turning to maintenance, modifications, energy and process industries. and operations (MMO), high oil prices resul- The company has some 23 000 employ- ted in several projects to extend the lifetime of ees, of whom 11 800 work in Norway, in addi- offshore installations, develop smaller-sized President and CEO Martinus Brandal tion to an insourced workforce of 10 000. Aker fields, and deliver environmental projects. Kværner headquarters are located at Lysa- Deliveries associated with Snøhvit, Statfjord Key 2006 events ker, near Oslo, Norway. Aker Kværner is listed Late-life, and Ormen Lange onshore facilities on the Oslo Stock Exchange, and Aker is the contributed to the high activity levels, as did company’s largest shareholder. removal and dismantling of Frigg installations In January 2007, Aker reduced its owners- for Total. Work is underway on several large ● Tragic accidents hip interest in Aker Kværner, from 50.01 per- and prestigious subsea projects, including off- Aker Kværner deeply regrets that cent to 40.1 percent. The purpose of the share shore Angola’s Dalia (phase 2) for Total, and despite intense focus on health, safety divestiture was to free up capital, strengthen KG-DG in India for Reliance Industries. The lat- and environment issues, fatal accidents Aker’s balance sheet, and increase its finan- ter project is one of the largest-ever subsea occurred in 2006. A total of five of the cial clout for further industrial targeting. development contracts worldwide. Also under- company’s employees and three employees of subcontractors died as a way are two subsea pumping stations for BP’s Favorable market developments result of accidents in 2006. Their deaths King and CNR’s Lyell, and the production sys- are somber reminders of the import- Aker Kværner’s main markets are developing tem for the Kikeh field for Murphy, Malaysia’s ance of continuing to work to reach the well and the market outlook is favorable. The first subsea field development project. overall objective of zero injuries to most important market drivers for the group Throughout 2006, there was also strong people, damage to equipment or are the increasing worldwide demand for growth in deliveries of other types of products property, or harm to the environment. energy, maintenance and upgrade of existing and services. For example, several new con- oil and gas fields, and development of new tracts for advanced drilling systems for great ● Refinancing In December 2006, the Aker Kværner fields and new technology to increase - reco water depths were entered into. group was refinanced. The refinancing very rates from maturing oil and gas fields. The largest ongoing project in Aker provides a strong financial structure, The offshore oil and gas market’s increas- Kværner’s Process segment is the YanSab increases the group’s financial flexibility, ing tendency to develop fields located in chal- petrochemical plant in Saudi Arabia. The pro- and removes former dividend lenging areas at great water depths and often ject, which began in 2005, is scheduled for restrictions. Annual interest costs will be featuring hostile weather conditions has resul- completion in 2008; progress in 2006 was reduced by approximately NOK 180 ted in high activity levels in key Aker Kværner according to plan. million as a result of the refinancing. markets. The company possesses state-of- Focus on technology ● Profitable growth the-art expertise both as to further develop- Aker Kværner had 2006 revenues of ment of fields already in production and in A unique combination of efficient technology NOK 50 592 million, up 37 percent development of new fields. Aker Kværner and the ability to deliver complete projects is compared with 2005. EBITDA was NOK holds a leading position in field development, key to value creation for Aker Kværner and 2 872 million, up 58 percent compared maintenance, upgrades, subsea production the company’s customers. Technology helps with 2005. Strong market growth, solutions, and process technologies. bring down costs, increase efficiency, and im- record-high order intake, solid The positive trend in international com- prove resource utilization. Technological ad- operations, and improved execution capabilities contributed to profitable merce, particularly in China, contributes to vances often improve health, safety, and envi- growth. The company was awarded high levels of investment activities in other ronmental performance. several interesting contracts in 2006; at industries that Aker Kværner serves. These In 2006, Aker Kværner invested NOK 106 year-end 2006, Aker Kværner’s order include the mining and metals, chemicals, million in select technology development pro- backlog stood at a record-high NOK and petrochemical industries. jects. In addition, Aker Kværner received sup- 59.7 billion. port and payment of NOK 13 million in addi- High activity levels tional technology development funding from In 2006, Aker Kværner enjoyed solid progress customers and public authorities in 2006. Tar- in the major Snøhvit and Ormen Lange projects geting of technology development will conti- in Norway. Contributing to high activity levels nue. are projects such as construction of the Aker In addition to Aker Kværner’s own develop- H-6e drilling rigs, the Blind Faith project in the ment projects, there is significant ongoing,

Aker ASA annual report 2006 15 Our business

Aker Kværner is expecting continued Aker Kværner is a world leader in subsea strong markets technologies, systems, and production solutions for offshore oil and gas fields. The company has developed a number of deepwater fields worldwide

project-specific development work being Going forward, it is expected that an increa- conditions, and on excellent completion of done in close cooperation with customers. sing proportion of Aker Kværner’s revenues projects that have already been won. will be generated in Asia and North America. The company’s goal is to achieve an Select niches Activities in China will be strengthened and EBITDA margin of between 6.5 percent and 7 Aker Kværner targets growth in select tech- new opportunities in the Middle East will be percent at year-end 2007. In line with what is nological niches. Technological development further developed. Similarly, prospective as- typical for Aker Kværner and for the industry will mainly focus on the following areas: signments in worldwide deepwater markets in general, quarterly profit variations are • LNG and complete gas value chains Gasi- and in Russia, Kazakhstan, and the Caspian expected for 2007.

fication, 2CO capture and storage, and de- Sea are being pursued. Strong market positions, combined with velopment of alternative energy sources the quality of the order backlog and the favo- • Subsea compressor and injection systems Outlook rable outlook in Aker Kværner’s main markets, and pressure boosters for pipelines Aker Kværner is expecting continued strong offer potential for further improvements in pro- • Development of deepwater and Arctic solu- markets for its business activities in 2007. Im- fitability in 2007 and beyond. tions proved profitability will take priority over reve- • Development of drilling and well intervention nue growth. Aker Kværner’s focus is on win- solutions. ning the right projects at the rights terms and

Key figures 2006 2005 20041)

Operating revenues NOK million 50 592 36 940 24 171

EBITDA NOK million 2 872 1 816 880 EBITDA margin Percent 5.7 4.9 3.6 Order intake NOK million 62 271 51 937 30 938 Order backlog (31.12) NOK million 59 695 48 522 32 478 Number of employees per (31.12) Number of employees 22 722 18 324 18 662

1) Aker Kværner ASA was established 1 April 2004

16 Aker ASA annual report 2006 Our business

Maintenance, modifications, and operations (MMO) crews are keeping busy extending the operating lifetime of installations, increasing oil and gas production, and adding environmental protection capabilities. Aker Kværner creates added value for its customers and shareholders

Increasing Building employee Targeting large-scale

competitiveness compentece CO2 capture

Aker Kværner strengthens its posi- With 17,000 completed courses, Aker Kværner is in the forefront in

tion in subsea products, technolo- eLearning has proven an efficient developing CO2 capture and sto- gies, and solutions. method for building expertise. rage technology from gas-powered facilities. The Southeast Asian oil and gas mar- Employee response to Aker Kværner’s nu-

ket is in rapid growth. Malaysia is at the merous Internet-based courses has been Full-scale rollout of the CO2 capture and center of the region’s development, and overwhelming. Because know-how is vital storage technology at a gas-fired power so Aker Kværner is increasing the level to the multinational engineering and con- generation facility is planned for 2014. of investments in a new subsea systems struction company’s success, it has laun- Fourteen petroleum and energy com- factory in Malaysia, from NOK 250 million ched a global eLearning portal that offers panies are participating in a project cal- to NOK 500 million. The factory is located a wide range of training courses under the led Just Catch™; the project’s goal is to in Port Klang, about an hour’s drive from auspices of Aker Kværner Academy. In establish a cost-effective technology for

Aker Kværner’s regional headquarters in 2006, use of the courses offered via eLe- CO2 capture from natural-gas-fired power Kuala Lumpur. arning has been a resounding success. plants. There is a great deal of public focus The production facilities will improve All Aker Kværner business areas use on this technology, as reduction of climate Aker Kværner’s ability to serve subsea- the eLearning portal. Employees can com- gas emissions is a high priority. market customers in Malaysia and the plete courses from their own PCs whenever Just Catch™ builds on a pre-study that rest of the strategically important Asia and and wherever they choose. The numbers was completed by Aker Kværner and two Pacific market. The location and capacity of both enrollees and certificates issued for utilities in 2004. An extremely promising of the Malaysian factory are expected to course completion are significantly above scrubbing technology was developed. The play an important role in winning new con- expectations. Just Catch™ project will develop techno- tracts for several other Aker Kværner busi- In the past two years, Aker Kværner has logy that slashes investment and operating

nesses in this growth region. developed its own, tailor-made courses on costs while capturing flue-gas CO2 more In 2006, upgrade investments were the Group’s project execution model and on efficiently. made at Aker Kværner’s subsea pro- topics related to health, safety and the envi- duction plant in Tranby near Oslo. The two ronment. Courses feature exams that must capacity expansions, in Malaysia and Nor- be completed before training is recorded way, are important for meeting projected as completed. In coming months, Internet- order growth. based training will be expanded further.

Starting up production in Malaysia Targeting competence building Developing environmentally friendly technology

Operating revenues EBITDA Order intake Order backlog NOK million NOK million NOK million NOK million

60 000 3 000 60 000 60 000

50 000 2 400 48 000 48 000 40 000 1 800 36 000 36 000 30 000 1 200 24 000 24 000 20 000

10 000 600 12 000 12 000

0 0 0 0 2004 2005 2006 2004 2005 2006 2004 2005 2006 2004 2005 2006

Aker ASA annual report 2006 17 Our business

Aker Drilling

Aker Drilling has the world’s two largest, most advanced drilling units under construction

18 Aker ASA annual report 2006 Our business

Market-tuned drilling units Aker Drilling secured good, long-term contracts for the company’s two drilling units, which are under construction. The sixth-generation units have generated keen market interest.

Aker Drilling is on schedule in building an inter- mersibles have been delivered since 1974. The national drilling rig business. The company’s two Aker H-6e hulls are built in Dubai, while topsides Aker H-6e units are specially designed to ope- and deck equipment are European-built. The rate safely and efficiently at great water depths units will be assembled and completed at Aker and under demanding weather conditions. Kværner Stord. President and CEO Geir Sjøberg In 2006, Aker Drilling passed several milesto- Aker Drilling is working closely with Aker nes. The company entered into drilling contracts Kværner on the two construction projects. The 2006 key events with Statoil and Aker Exploration. Aker Drilling Aker H-6e contracts, which are based on a fixed and its two drilling units have been well recei- price per drilling rig of NOK 3.83 billion, feature ved in the market, evidencing the company’s standard-setting specifications. Aker Drilling’s successful response to market demand. own experts monitor the construction projects on At year-end 2006, Aker Drilling had 18 an ongoing basis to maintain quality assurance ● Breakthrough employees in Stavanger. Over the next two years, and ensure that the rigs are delivered on sche- Long-term contracts with Statoil and staffing will be increased by about 400. Aker Dril- dule and at the agreed-to price. Aker Exploration were secured for Aker ling is listed on the Oslo Stock Exchange. Aker Drilling’s two drilling units; and are scheduled for delivery in April and owns 39.9 percent of Aker Drilling, and is the Long-term drilling contracts October 2008, respectively. company’s largest shareholder. Aker H-6e units are tailored to the future needs of the market. Aker Drilling has entered into Rigs for the future an agreement with Statoil for the first of the ● Attractive terms The agreement with Statoil will have a Aker Drilling owns advanced semi-submersible company’s two units, which will be delivered in potential total value of approximately drilling units and contracts them with ancillary April 2008. The unit is contracted for drilling ope- USD 885 million, based on a five-year services. The sixth-generation Aker H-6e design rations at Halten Nordland in the Norwegian Sea; term and full unit utilization. Until 2008, builds on the well-proven Aker H-3 and H-4.2 the contract has a term of between three to ten Statoil has the option to determine the concepts, which have been in operation world- years, with options for five two-year extensions. final contract term. The agreement with wide over several decades. The drilling contract with Aker Exploration is Aker Exploration has a potential The two Aker H-6e units now under con- for the rig that will be commissioned in October contract value of about USD 610 million struction will be the world’s largest and most 2008. The three-year agreement covers opera- over a period of three years. advanced semi-submersibles. They also set new tions on the Norwegian continental shelf, and fea- industry standards. The units can bore wells tures options that allow Aker Exploration to extend more than 10,000 meters deep, while deployed at the agreement by an additional two years. sea depths of up to 3,000 meters. Aker Drilling’s Aker Drilling’s contracts confirm the marketability units are designed for drilling year-round under of its two drilling units. Aker Drilling is well posi- harsh weather conditions, meticulously outfitted tioned in a market with a favorable outlook. for operations in environmentally sensitive areas, and they conform to the most stringent workplace and health and safety standards. Aker H-6e offers advantages that contribute Cutting-edge organization to efficient operations for oil companies. The platform’s Dual RamRig® drilling package significantly increases drilling rates and operatio- Aker Drilling is building a full-spec- corporate culture that ensures accountability, nal capabilities through parallel operations. The trum operational organization. The quality, and expertise throughout all value-chain semi-submersible platform’s unique hull design company’s rigs will be crewed by Aker links. provides great stability, so that drilling continues Drilling employees. Over the next two years, Aker Drilling staffing under weather conditions that would shut down During the current build-up phase, activity le- will grow by about 400 experienced and quali- competitors’ rigs. The drilling units have large vels have been high. Construction follow-up, fied professionals. It is of particular importance payload and storage capacity. marketing of the two units, and expanding to establish an organization that will become a the company’s organization have kept Aker world leader in efficiency and ability to deliver — Drilling’s management busy in 2006. and that will demonstrate the highest standards Construction projects Aker Drilling aims high when it comes to qua- as to health, safety, and environment. Aker Drilling’s two deepwater units will be deli- lity and expertise. Its ambitions are also reflec- The success of the recruitment process, vered by Aker Kværner, a world leader in the de- ted in the efforts to build the company’s organi- shows that Aker Drilling is viewed as an attractive velopment and construction of semi-submersi- zation. A key goal is establishing a value-based employer. ble drilling units. More than 50 such semi-sub-

Aker ASA annual report 2006 19 Our business

Aker Floating Production

Aker Floating Production is building a fleet of modern production and storage ships, so-called FPSO (Floating Pro- duction, Storage and Offloading) vessels

20 Aker ASA annual report 2006 Our business

Personnel with state-of-the-art expertise.

Breakthrough in India In just a short period, Aker Floating Production has established a solid foundation for the future. The breakthrough is a prestigious offshore field development contract in India.

Aker Floating Production’s business idea is to Yards. Aker companies comprise the entire own, operate, and charter vessels equipped value chain of oil and gas expertise, covering for offshore oil and gas production and sto- engineering, exploration, drilling, subsea pro- rage. The company has purchased three tan- duction equipment, offshore platforms, FPSOs, kers for conversion into production vessels at LNG carriers, and onshore facilities. The Aker President and CEO Svein Olsen Jurong Shipyard in Singapore. group of companies is characterized by a uni- Fast-paced, focused work has characteri- que combination of a strong industrial, tech- Key 2006 events zed the company’s first year of operation. In nological platform and a robust financial foun- January 2007, Aker Floating Production saw dation. its commercial breakthrough — in India. Reli- Breakthrough ance Industries Ltd. signed a letter of intent for ● Foundation for the future the provision and operation of the FPSO Aker Reliance Industries, one of India’s largest Experienced, senior key personnel hired. Smart 1 oil production and storage vessel for and most successful enterprises, has entered Three tankers purchased for conversion a minimum term of five years, beginning in into an letter of intent with Aker Floating Pro- into adaptable, modular production February 2008. duction for the provision and operation of the vessels. FPSO Aker Smart 1 chartered Aker Floating Production was listed on the company’s first FPSO and deliveries of sub- as of 15 February 2008. The company is financially robust. Oslo Stock Exchange in June 2006. Aker owns sea production equipment. The five-year char- 51.1 percent of Aker Floating Production stock. ter agreement will generate revenues of appro- The oil production company, which is in a build- ximately NOK 3.8 billion for Aker Floating Pro- ● Growth market up phase, is headquartered at Fornebu, just duction. Demand for FPSOs is growing. Four west of Oslo. FPSO Aker Smart 1 will operate at the MA submarkets prevail: Benign seas (Equatorial regions), major engineering- field in the Krishna Godavari Basin of the Bay Smart solution driven projects, EPCI contracts, and of Bengal, India, at water depths ranging from areas with demanding climatic Aker Floating Production offers oil companies 1,100 meters to 1,400 meters. First oil is sche- conditions. Aker Floating Production is a that operate in Benign waters a unique solution, duled to be produced in February 2008. new participant in the rapidly growing marketed as the Smart concept. The concept In total, the Reliance Industry’s MA field Benign-zone market. provides a standard solution for production development contract is roughly equivalent to and storage vessels so-called FPSO (Floating the value of three standard, generic FPSOs. As Production, Storage and Offloading). a consequence of the contract’s scope, sche- Equipment modifications to meet custo- duled conversion of additional tankers into Aker mers’ specifications can be made easily and at Smart FPSOs will be delayed by six months. reasonable cost. The chartering oil company pays an attractive day rate for its Aker Smart FPSO. The FPSO provides reliable operation, Aker-wide teamwork and features recognized and well-proven technology. Aker Floating Production converts oil tankers into adaptable FPSOs at its own expense, Aker companies are working together duction equipment, while its subsidiary Aker retains ownership of the vessels, and charters to deliver a total field development Marine Contractors is responsible for installing them to oil companies. Thus, field deployment solution to a field located at water anchoring systems and for tie-in of the Aker and petroleum production can begin faster depths of between 1,100 meters and Smart 1 production and storage vessel. with Aker Smart FPSOs than with vessels offe- 1,400 meters in the Bay of Bengal. FPSO Aker Smart 1 has a production capa- red by competitors. Faster production of first city of 60,000 barrels of oil per day. Installed oil makes offshore field investments more pro- The letter of intent with Reliance Industries of on board are gas export and injection facilities fitable. India is a good example of how Aker compa- with a capacity of about three million standard nies work together. Aker Floating Production cubic meters of gas per day. Aker companies’ reputation as a preferred partner and total Aker origins and Aker Kværner are jointly responsible for total field development deliveries worth more field-development supplier won them the MA The Aker Smart concept for floating production than NOK 6 billion. field development project, off the east coast and storage originated with Aker’s value-crea- Aker Kværner is delivering the subsea pro- of India. ting triangle, comprising the active ownership company Aker, Aker Kværner, and Aker

Aker ASA annual report 2006 21 Our business

Aker Exploration

Aker Exploration explores for oil and gas on the Norwegian continental shelf — and has access to the world’s most advanced rigs for drilling in environmentally sensitive areas

22 Aker ASA annual report 2006 Our business

Ready to explore Aker Exploration is ready to discover new petroleum resources on the Norwegian continental shelf. The exploration company has the right rig, a solid capital base, and offshore license ownership stakes. Drilling start-up is scheduled for 2008.

Aker Exploration is a streamlined exploration projects in the northern part of the North Sea, company on the Norwegian continental shelf. the Norwegian Sea, and the Barents Sea. President and CEO Bård Johansen The company partners with oil companies to Aker Exploration’s willingness to partner in find new oil and gas reserves. drilling specific exploration wells makes it an 2006 key events Aker Exploration offers a unique solution: attractive collaborative partner for small and Rig for Oil. Under this concept, Aker Explora- medium-sized oil companies that otherwise tion offers oil companies, ultra-modern rigs for would have no access to drilling rigs. exploration drilling and receives compensation ● Long-term rig agreement in the form of license ownership stakes. Demand for rigs The Aker H-6e semi-submersi-ble drilling Aker Exploration is recruiting geologists, Demand for exploration rigs is rising. Aker Ex- rig is particularly well suited to operations geophysicists, and people with reservoir ploration has a solution to a bottleneck in oil in environ-mentally sensitive areas and expertise to work at the company’s offices in and gas exploration. Oil companies struggle rough weather conditions, cold climates, Stavanger and Oslo. In December 2006, Aker to secure rigs for drilling wells for limited con- and great water depths. The rig is also able to handle challenging well Exploration carried out a private placement tract periods, while drilling companies are in- conditions, such as high pressure and of shares. Plans are to list the company on tent on signing long-term charters in a tight temperatures. The rig’s day-rate for the the Oslo Stock Exchange in the first half of rig market. three-year period beginning 31 October 2007. Aker’s shareholding in Aker Exploration Aker Exploration offers oil companies 2008 is USD 520,000. is 49.9 percent. exploration drilling in return for license ownership stakes. This creates a win-win situ- ● Solid capital base Writing oil history ation for oil companies, Aker Exploration, and Aker Exploration has raised NOK 915 Aker Exploration intends to write a new chap- public authorities. million in equity from international and Norwegian investors. Of this amount, ter in Norway’s oil and gas history. Norway’s Aker Exploration’s goal is to drill between Aker contributed approximately NOK 300 Ministry of Petroleum and Energy pre-quali- five and seven wells annually over a three-year million. Investors contributed a further fied Aker Exploration as a Norwegian conti- period, beginning in 2009. If the company’s NOK 457.5 million in convertible bonds. nental shelf rights holder in December 2006. future drilling success approximates the his- A bridge credit facility of NOK 1.83 billion Also in December 2006, Aker Exploration torical track record, Aker Exploration will enjoy is managed by banks. secured access to an advanced rig, and fina- solid profitability. lized its first agreement to swap exploration drilling in return for an ownership interest in an offshore field license. In January 2007, Key licenses in northern waters Aker Exploration was awarded a 15-percent ownership stake in an interesting block in the northern region of the North Sea. (See accompanying article). As of January 2007, Aker Exploration vide the drilling rig and will cover Pertra’s 25- has secured ownership interests in percent share of field drilling expenses. A 3D With a capital base totaling NOK 3.2 bil- two strategically important licenses. seismic survey was acquired in 2006. The sur- lion, a rig charter agreement, and its first vey data is being processed, and will be inter- license stakes, Aker Exploration has establis- Since start-up, Aker Exploration has received preted, after which a final drilling decision will hed a solid foundation for further license port- favorable feedback on the company’s busi- be made. The other license partners are Talis- folio growth. ness model from oil companies, public autho- man Production Norway and Hydro. rities, and investors. Two offshore license sta- In the APA 2006 (Awards in Predefined Ultra-modern rig kes have been acquired to date. Areas) licensing round, Aker Exploration was granted a 15-percent stake in Block 31/8 in the Aker Exploration has entered into a three-year The company has entered into an agreement with the oil company Pertra, under northern part of the North Sea. E.ON Ruhrgas drilling contract with the listed rig company which Aker Exploration will acquire 15 percent is the field operator; the other partner is Rock- Aker Drilling for the world’s largest and most of license PL 321 in the Frøya area, located source. Aker Exploration will participate acti- advanced drilling rig, beginning 31 October between the Ormen Lange and Njord fields in vely in future licensing rounds on the Norwe- 2008; the contract term can be extended by the Norwegian Sea. Aker Exploration will pro- gian continental shelf. an additional two years. Aker Exploration will focus on exploration

Aker ASA annual report 2006 23 Our business

Aker Yards

Liberty of the Seas and Color Magic meet in December 2006; both large, luxu- rious vessels were built by Aker Yards.

24 Aker ASA annual report 2006 Our business

Strengthened position Aker Yards is strengthening its position as a leading international shipbuilding group. Strategic acquistions in France, Ukraine, and Norway increased the number of Group Shipyards from 13 to 17. The order backlog is at an all-time high.

Aker Yards is Europe’s largest shipbuilder. Growth and deliveries The shipyards group delivers advanced ves- 2006 was characterized by high activity levels sels in the market segments for cruise ships and decisive action. Aker Yards delivered a and ferries, merchant marine vessels, and off- total of 50 vessels in 2006, of which four were President and CEO Karl Erik Kjelstad shore and specialized vessels. cruise ships or ferries, 22 were merchant ves- The Aker Yards group has a total of 17 sels, and 24 offshore or specialized vessels. shipyards, located in Norway, Finland, Ger- Aker Yards’ three business areas strengthe- many, France, Ukraine, Romania, and Brazil. ned their market position in 2006. In addition, A new shipyard is under construction in Viet- key structural steps for further growth were nam. implemented. ● Tragic accidents The shipyard group has 20,342 employees, The investments in four additional shipy- Aker Yards deeply regrets the loss of of whom 1,835 work in Norway. Aker Yards is ards in France, Norway, and Ukraine gave two employees of subcontractors in headquartered in Oslo, Norway. The company Aker Yards access to additional capacity fatal accidents in 2006. The is listed on the Oslo Stock Exchange. Aker is and expertise, allowing for a broader range implementation of a health, safety and Aker Yards’ largest shareholder. of cruise ships, ferries, and merchant ves- environment (HSE) improvement program continues. A series of In January 2007, Aker reduced its owners- sels. To participate in a larger part of the important measures have been hip interest in Aker Yards from 50.4 percent value chain for offshore and specialized ves- introduced to bring the company’s HSE to 40.1 percent. The share divestiture was sels, Aker Yards has dedicated significant performance closer to its goal of zero part of Aker’s overall strategic plan to free up resources to developing its own vessel con- injuries to personnel, damage to the liquidity and strengthen its balance sheet for cepts and design. As a result, 15 vessels with environment or equipment. further industrial targeting. in-house developed designs are in the order backlog of Offshore & Specialized Vessels as ● Streamlined structure Positive driving forces of early 2007. The organizational structure of Aker Yards’ main activities has been Economic developments in the USA and Eu- streamlined into three business areas: Technological advances rope are an important driver for market de- Cruise & Ferries, Merchant Vessels, and mand for new cruise ships. The trend is for Aker Yards’ business activities work at the fore- Offshore and Specialized Vessels. Each ever larger ships, and new generations of ves- front of technological advances in the shipy- of the group’s 17 shipyards is placed in sel types have been developed or are under ard group’s areas of specialization. Building one of these business areas. The development for the four key cruise ship ope- specialized tonnage requires precision plan- business areas’ management teams rators worldwide. Cruise ships are built almost ning and an ability to innovate. have been strengthened, and key measures have been made to position exclusively by European yards. Cruise ship The Aker Yards Group’s extensive experi- each for new growth. building demands high levels of specialized ence, modern design, and project manage- know-how and a network of subcontractors ment tools, wide range of yard capacities, ● Growth and capacity increase experienced in deliveries beyond those requi- and organizational structure reflective of its The acquisition of the French shipyards red for standard tonnage. The cruise ship mar- main markets, result in competitive pricing, in Saint-Nazaire and Lorient doubles ket developed favorably throughout 2006. efficient project execution, and shorter - deli Aker Yards’ cruise and ferries capacity. Economic growth and increased trans- very times. With yards in seven countries, the Aker Yards now has a market share of portation needs are also positive for the ferry group is able to benefit from differing cost more than 35 percent for larger-sized cruise ships, in terms of total gross market and demand for containerships and structures and engineering expertise at its tonnage in the order backlog. Merchant other merchant vessels. The market for off- various shipyards. Vessels’ capacity increased with the shore vessels is affected by activity levels in To meet the challenge of ever increasing yard acquisitions in Ukraine and the international offshore market. competition, Aker Yards has targeted ship- Norway; the yards are also cooperating Increased offshore exploration activity building market segments that require high on an important new range of chemical and production of oil and gas are generating levels of innovation and expertise. Employees tankers. Aker Yards’ order backlog is at strong demand for offshore vessels. Activity participate in the development of new build- a record high. levels in the market for offshore and speciali- ing methods, new technology, and new solu- zed vessels remained high through-out 2006. tions for demanding customers throughout the world.

Aker ASA annual report 2006 25 Our business

Experienced professionals

Developing its own vessel designs is a facet of in all phases of shipbuilding what makes Aker Yards the preferred partner for assist shipowners in innovation. Considerable resources have been spent on innovative concepts and designs for realizing their objektives customers ordering offshore and specialized vessels

Designed for innovation ced professionals in all phases of shipbuild- ket with resource shortages. A significant pro- Innovative vessel design is fundamental to ing assist shipowners in realizing their objec- portion of work on the vessels that Aker Yards Aker Yards’ success. The ability to continu- tives by developing concepts that yield higher delivers is performed by contractors and sub- ously push the envelope as to functionality revenues and increase profitability. contractors. Thus, continuous and effective and technical solutions is among the group’s contact and follow-up with suppliers, contrac- advantages in international competition. Outlook tors, and collaborative partners is critical. A common factor in projects in which Aker Although Aker Yards enjoys a strong market Aker Yards’ goal of an aggregate EBITDA Yards has broken ground is close cooperation position, the group operates in a global mar- margin of seven percent for all group busi- with customers. Although Aker Yards posses- ket with fierce competition. It is expected that ness areas will not be reached in 2007. The ses comprehensive know-how about custo- the shipbuilding market will continue to be fa- group’s current order backlog secures solid mers’ markets and market mechanisms, it is vorable. activity levels at all three business areas until customers themselves who are most familiar The high activity levels in the shipbuild- 2009, with some deliveries extending into with their business opportunities. Experien- ing industry have led to an overheated mar- 2010.

Key figures 2006 2005 20041)

Operating revenues NOK million 25 861 16 607 12 490

EBITDA NOK million 1 443 1 029 768 EBITDA margin Percent 5.6 6.2 6.1 Order intake NOK million 47 892 32 084 17 283 Order backlog (31.12) NOK million 79 420 38 897 23 366 Number of employees per (31.12) Number of employees 20 342 13 442 13 069

1) Pro forma 2004

26 Aker ASA annual report 2006 Our business

The President’s Safety Award for best HSE performance in 2006 was awarded to the workforce at Saint-Nazaire Shipyard

Cooperation across national borders Innovative partner

At Aker Yards, people cooperate across Aker Yards has achieved cruise-industry re- Innovative ship design makes Aker shipyards and across national borders. cognition for its ability to build innovative Yards the preferred partner Cooperation promotes shipbuilding cruise ships — ships that invite passengers innovation and cost-effectiveness. to sail to new experiences. When the group Aker Yards’ new design strategy asks acquired the two shipyards in France, two the question: How can we meet our In August 2006, Aker Yards acquired a majo- former competitors began to cooperate on customer’s future needs and goals? The rity shareholding in Damen Shipyards Okean further developing the world’s leading shipy- design strategy reinforces Aker Yards’ in Ukraine. Also in August 2006, Aker Yards ard group for cruise ship newbuilding. adaptability and is an ongoing source of acquired the Kleven Florø shipyard in Norway, For three months, Aker Yards’ cruise ship pro- vessel improvements that help the shipy- and Kleven Design. fessionals surveyed work procedures and ard group maintain its industry profile: The acquisitions secure hull and shipbuild- processes as well as expertise at the five preferred for innovation. Customer rela- ing capacity in Ukraine and state-of-the art shipyards that comprise the Cruise & Fer- tions, expertise, creativity, and team work expertise in Norway on the use of stainless ries business area. Implementation of recom- are decisive for success. steel for building advanced chemical tankers. mendations for improving efficiency and har- Royal Caribbean international preferred Together, the two yards will deliver the world’s vesting synergies is underway. The overall ob- to work with Aker Yards to develop, design, most advanced chemical tankers. jective is to achieve annual costs savings of and build its next-generation cruise ship, at least EUR 100 million by 2011. Genesis. An effective partnership bet- Harvesting synergies ween RCCL and Aker Yards was vital to Successful integration of the shipyards acqui- creating the world’s largest cruise ship. At red in 2006 and their ongoing restructuring 220,000 gross tons, Genesis is an impres- are key to achieving synergies and promo- sive 43 percent larger than the current lar- ting profitability. Aker Yards has a solid track gest cruise ship, RCCL’s Freedom of the record for effective integration of acquired Seas, which was completed by Aker Yards resources, which has resulted in greater cost- in 2006. The partnership of customer and effectiveness and added innovative capacity. shipyard resolved numerous technical One of Aker Yards’ ongoing integration pro- challenges in developing Genesis, and jects is associated with the 2006 acquisition added features that assure passengers of the shipyards in Saint-Nazaire and Lorient, spectacular cruise experiences. France. Work began immediately after finali- In recent years, Aker Arctic, Aker Yards’ zation of the acquisition agreement. Nearly research and development unit for ves- 300 experts on building cruise ships and fer- sel designs for arctic waters, targeted the ries from Finland and France began working development of cost-effective transporta- together to identify smarter building methods tion solutions for ice-covered waterways. for the future. These efforts yielded a concept for “double-acting” icebreaking containerships that traverse ice-covered seas without icebreaker assistance. The proto- Staff at Aker Yards’ Finnish and French ship- type vessel’s success led to an order of yards are sharing and improving working met- four more icebreaking container/cargo hods and expertise for building cruise ships ships in 2006. and ferries.

Operating revenues EBITDA Order intake Order backlog NOK million NOK million NOK million NOK million

30 000 1 500 50 000 80 000

25 000 1 200 40 000 64 000 20 000 900 30 000 48 000 15 000 600 20 000 32 000 10 000

5 000 300 10 000 16 000

0 0 0 0 2004 2005 2006 2004 2005 2006 2004 2005 2006 2004 2005 2006

Aker ASA annual report 2006 27 Our business

Aker American Shipping

The Philadelphia shipyard delivered the first in a series of product tankers in February 2007. Overseas Shipholding Group will charter up to 16 of the yard’s Veteran MT 46 product tankers

28 Aker ASA annual report 2006 Our business

Operating revenues EBITDA Amounts in USD thousands Amounts in USD thousands

255 000 22 000

204 000 16 500

153 000 11 000 102 000

5 500 51 000

0 0 2004 2005 2006 2004 2005 2006

Sailing into a strong market

Aker American Shipping has captured a strong position in the robust and promising markets for building and owning product tankers in the US.

Aker American Shipping builds, owns, and shipowner in the US market. The shipyard’s charters vessels for the so-called Jones Act productivity has increased, impressively, and market in the United States. The Jones Act re- continues to improve. The yard has sped up quires that all commercial vessels freighting its production, from less than a single vessel goods between US ports must be built in the a year as of the first quarter of 2005 to about US, sail under the US flag, and be owned and 2.2 vessels annually by year-end 2006. President and CEO Dave Meehan operated by US citizens. The Philadelphia yard delivers product Aker American Shipping holds a strong tankers at lower cost and two to three years 2006 key events position in the US market, both as a shipbuil- earlier than its competitors. der and shipowner. The company’s Aker Phi- ladelphia Shipyard is a modern yard using First-rate partners advanced production methods for building Aker Shipping Corporation is establishing it- ● Solid order backlog containerships and product tankers. self as the leading product tanker owner in At the close of February 2007, Aker Aker Shipping Corporation owns the pro- the promising Jones Act market Philadelphia Shipyard has 15 product duct tankers built at the Philadelphia yard. As Cooperation with Overseas Shipholding tankers on order, three of them options. of February 2007, up to 16 product tankers Group (OSG) one of the world’s leading ship- Total value of the chartering agreements are to be bareboat chartered, under long-term ping companies, ensures first-rate shipping with Overseas Shipholding Group is close to NOK 8 billion. agreements, to the US shipowning company expertise. OSG is responsible for the product Overseas Shipholding Group, which rechar- tankers’ operations and chartering to US end- ters the vessels to shipping companies. users. ● Robust financing The charter agreements represent an The Philadelphia yard works closely with Gjennom året har det vært arbeidet med income stream of NOK 8 billion for Ameri- two of the world’s leading shipyard groups, Throughout 2006, efforts were expended to secure solid financing for construction can Shipping Corporation, plus potential pro- Aker Yards and Hyundai Mipo Dockyards of the first ten product tankers; the USD fit sharing. Nine of the product tankers are Demand for product tankers in the US mar- 770 million in refinancing was in place in already chartered to customers under long- ket is rising. A strong driver is the Oil Pollution February 2007. Long-term agreements term charter agreements, four of them with Act of 1990 (OPA 90), enacted in response with end-users have been secured for Tesoro, three with BP, and two with Shell. to the extensive Alaska-coast oil spill resulting nine of the ten first vessels at The Aker American Shipping group has from the grounding of the Exxon Valdez oil satisfactory charter rates. 718 employees and an additional 450 staff tanker. OPA 90 requires that only double-hul- working for subcontractors. The company, led tankers, such as the vessels built by Aker headquartered in Philadelphia, Pennsylva- American Shipping, are approved for trans- American Shipping a solid market outlook. nia, in the US, is listed on the Oslo Stock port in US waters as of 2015. Productivity is expected to increase by 25 Exchange. Aker owns 53.2 percent of Aker Old, single-hulled product tankers are to percent from the first to the third ship in the American Shipping shares. be phased out and new vessels will be built. tanker series. The current order backlog will The pending fleet replacement gives Aker sustain high capacity utilization through 2012. New era in Philadelphia The Philadelphia shipyard is entering a new phase. In 2006, the last of a series of four Growth with the Jones Act containerships was delivered to Matson Navi- gation. The customer has expressed great satisfaction with the vessels. In February 2007, the yard delivered its first product tanker. Aker Philadelphia Shipyard is currently The Jones Act market comprises just Aker Philadelphia Shipyard was built on the site of the historic US Navy Yard with USD building a series of nine product tankers. In over 120 vessels of more than 1,000 gross tons. Newbuilding demand is ri- 400 million in funding from US authorities. The February 2007, the yard entered into an agre- sing. yard’s owners invested an additional USD 135 ement to build three product tankers, inclu- million. A management agreement between ding options for three additional vessels. The Since 1990, some thirty Jones Act merchant Aker American Shipping and Aker Yards yard’s in-house designed, 46 000 deadweight vessels have been built at US yards. The fleet forms a solid foundation for cooperation bet- tons product tankers are Veteran Class MT-46 is aging. Only four yards in the USA have deli- ween the two companies. Jones Act product tankers. vered product tankers in the past 15 years. Aker American Shipping’s contracted newbuildings position it as a first-class yard and

Aker ASA annual report 2006 29 Our business

Aker BioMarine

Aker BioMarine holds a unique market position, with state-of-the-art expertise throughout its value chain — from research and development, to harvesting, processing, and product development, through sales, and marketing of Omega 3-based products made from krill.

30 Aker ASA annual report 2006 Our business

Operating revenues EBITDA NOK million NOK million

500 50

400 40

300 30

200 20

100 10

0 0 2004 2005 2006 2004 2005 2006

Healthy ingredients made from krill Aker BioMarine combines expertise in deepwater fisheries and biotechnology. The company targets nutriceuticals, aquaculture, and pharmaceuticals markets. Aker BioMarine is building an international value oil and positioning Aker BioMarine in marine ingredients company that develops, high-growth nutriceuticals, aquaculture, and produces, and markets Omega 3-based pro- pharmaceuticals markets. President and CEO Helge Midttun ducts from krill. Dietary supplements and additives used in food, specialty aquaculture Pro-health ingredients Key 2006 events fodder, and pharmaceuticals, are key markets Krill oil is rich in bioactive components that for Aker BioMarine. have documented health benefits for humans, In addition to krill harvesting and proces- as well as for fish. Aker BioMarine’s krill oil will sing in the South Atlantic, Aker BioMarine has have important markets in pharmaceuticals, ● Targeting biotechnology activities associated with production of surimi food, and aquaculture industries. Aker BioMarine acquired 89.1 percent in Argentina and the Faeroe Islands fisheries, In 2007, Aker BioMarine will accelerate of the listed biotechnology company as well as other fish products. targeted production of valuable, bioactive Natural ASA. The acquisition creates a Aker BioMarine, headquartered in Oslo, marine additives and ingredients for pharma- solid foundation for aggressive targeting Norway, has almost 600 employees, of whom ceuticals and food. of vital markets. Plans are to merge Natural and Aker BioMarine and to take 550 work outside of Norway. In December Through the acquisition of Natural, Aker Aker BioMarine public in the first half of 2006, the company completed a NOK 1.2 BioMarine possesses comprehensive exper- 2007. billion private placement of shares. Plans tise and capabilities in product development, are to list Aker BioMarine on the Oslo Stock sales, and marketing. ● Market capitalization Exchange in the first half of 2007. Aker owns Aker BioMarine represents a unique indus- Following the December 2006 share 75 percent of Aker BioMarine. trialization, having combined deepwater fis- issue, Aker BioMarine had a market heries know-how and biotechnology proces- capitalization of NOK 5.1 billion. Innovative harvesting method sing to create a leading ingredients company. Accordingly, Aker’s ownership stake in Aker BioMarine amounts to Krill, a shrimp-like invertebrate, is a sensitive Efforts towards its goal — to become the pre- approximately NOK 3.9 billion, or nearly raw material. Use of a conventional trawl, in ferred partner for the dietary supplements, 10 percent of Aker’s industrial holdings. which a net is repeatedly paid out and hauled food, and pharmaceuticals industries — are onboard, kills the krill, resulting in destruction underway. of the nutritious biomass. Aker BioMarine’s harvesting technology, so-called Eco Harvesting, brings krill onboard the fishing vessel alive. Processing begins Building blocks for the body’s cells immediately on the factory trawler Saga Sea, which is outfitted especially for krill harvesting. Krill oil contains unique bioactive ingre- xidant. Astaxanthin, derived from krill oil, repre- High-value production dients, such as Omega 3-bound phos- sents one of the most powerful anti-inflammatory Aker BioMarine will harvest approximately pholipids and the antioxidant astaxan- antioxidants available. When consumed along 200,000 metric tons of krill annually. The first thin. with Omega 3, astaxanthin enhances several of processing step is to turn krill into krill meal. Intake of Omega 3 phospholipids enhances Omega 3’s benefits. Thus, krill oil is a desirable additive to a variety A significant proportion of this meal is further cell membrane elasticity and promotes molecu- lar transport across cell membranes. Omega 3 of foods, so-called functional foods. The functio- processed into high-value oils, using advan- phospholipids are essential building block for nal foods market is in strong growth, especially ced extraction methods. Annual meal pro- all body cells. in Europe and Asia. Traditional health food and duction is estimated at 25,000-30,000 metric Although the benefits of Omega 3 phospholi- dietary supplements, including pills, are also an tons, from which high-value oils are extracted. pids in promoting physical and mental health important market segment for krill oil. Production of high-value krill oil in 2010, is are wildly recognized, limited access to natural In aquaculture, specialized feed of various expected to amount to about 1,200 metric tons. sources of high-value Omega 3 phospholipids types is a key market for the company’s krill oil Over the next couple of years, production will has been an obstacle to developing the market products. The astaxanthin contained in Krill oil internationally. and krill meal give salmon and trout their prized increase gradually to double that volume. Krill contain the nature’s strongest antio- red color — in a natural way. The company’s growth potential is mainly associated with increased extraction of high-

Aker ASA annual report 2006 31 Our business

Aker Seafoods

Aker Seafoods spans the entire value chain

32 Aker ASA annual report 2006 Our business

Operating revenues EBITDA NOK million NOK million

2 500 200

160 1 875 120 1 250 80

625 40

0 0 2004 2005 2006 2004 2005 2006

Fresh fish yields results All Aker Seafoods business areas reported profit growth in 2006. Sharper targeting of fresh and processed seafood products is paying off.

Aker Seafoods is a leading international se- products from its most important customers. afood company that spans the entire value In 2006, there was a pronounced increase in chain — from harvesting white fish, to proces- market prices for white fish and filet products, sing high-value products, to sale to quality- both in the first-hand and finished goods conscious European consumers. Because markets. Aker Seafoods is expecting the company has its own trawler fleet, it is demand to continue to increase in 2007. President and CEO Yngve Myhre able to deliver fresh seafood products 364 Targeting of increased production and days a year. sales of fresh fillets, loins, and other filet pro- 2006 key events Aker Seafoods harvests cod, saithe, and ducts has contributed to greater profitability. haddock, using the company’s 14 modern fishing vessels and through cooperation with Profitability in all business areas the coastal fleet in northern Norway and Den- Growth in demand for fresh, high-value frozen ● Strong price growth mark. Processing takes place at Aker Sea- seafood products continues. Several of Aker The first-hand price of cod increased foods’ eleven wholly owned facilities in Nor- Seafoods’ largest food retailer customers ex- 12 percent in 2006, according to the way and Denmark. Products are sold by seve- pect the sale of white fish products made of Norwegian Fishermen’s Sales ral of Europe’s largest food retailers, but are first-class fresh raw materials to increase by Organization (Norges Råfisklag). In the also brought to market through distributors in more than 20 percent in 2007. market for finished goods, export prices rose by 12 percent for fresh filet Asia and the United States. In this regard, the challenge will be to products, and frozen filet product prices With 1 167 employees, of whom 894 work secure adequate access to fish for our pro- increased by eight percent, according in Norway, Aker Seafoods is among the lar- cessing facilities. Regulatory changes that to statistics from the Norwegian gest employers in Norway’s fisheries industry affect quotas, fleet structuring, and delivery Seafood Export Council. and a major participant in Denmark. Aker Sea- obligations have major consequences for foods is listed on the Oslo Stock Exchange. Aker Seafoods. ● Restructuring and efficiency Aker is the largest Aker Seafoods shareholder, In late 2006, there was clarification of deli- Aker Seafoods has completed its fleet owning 65 percent of the company. very terms for trawlers whose quota licensing restructuring program and reduced the number of vessels from 21 in 2003 to 14 stipulates where catches must be landed. For at year-end 2006. Provided the Health trends promote growth Aker Seafoods, the new guidelines mean that company’s December 2006 application An increasing number of people are the value chain links between harvesting and to purchase an additional fishing quota becoming aware of the numerous health processing provide needed flexibility and sta- is approved, the company will control benefits derived from eating seafood, as well ble access to raw materials. 29.3 fishing licenses as of early 2007. as its satisfying taste. The continuing public Deliveries to food retailers’ private labels focus on healthy seafood and nutrition is a continue to increase. In addition, Aker Sea- ● Profit growth for all business areas Aker Seafoods had a 2006 EBITDA of source of optimism in the fisheries industry foods is increasingly targeting its own labels, NOK 235 million incl. exeptional items, with regard to current and future growth. such as Thorfisk in Denmark and Aker Sea- up from NOK 181 million in 2005. The Aker Seafoods is experiencing strong growth foods in Norway and Sweden. increase is attributable to price growth, in the demand for high-quality seafood a better product mix, and improved operations in the business areas.

From the Barents Sea to Paris ● New market strategy A new market strategy to promote Aker Seafoods’ own local brand names was prepared in 2006. Further, Aker Seafoods will continue to target volume Aker Seafoods tracks fish from the Ba- The company exports about 80 percent of the increases and closer cooperation with rents Sea to retail counters in Europe. output of Aker Seafoods’ facilities in Norway food retail chains for delivery of the In Paris, consumers pay more than NOK and Denmark. The Nordic countries constitute chains’ private-label brands. 200 per kilo of fresh cod loins. the largest market area, with 38 percent of sales; France has a share of 26 percent, ac- France is the market in Europe that pays the cording to 2006 statistics. Aker Seafoods will highest prices for cod. Aker Seafoods is re- shift its product mix even more toward fresh sponsible for more than half of Norway’s seafood, an attractive market that is willing to white fish export to the French market. pay for quality products.

Aker ASA annual report 2006 33 Our business

Aker Material Handling

Customer-tailored solutions and advanced storage systems are Aker Material Handling hallmarks

34 Aker ASA annual report 2006 Our business

Operating revenues EBITDA NOK million NOK million

1 700 80

64 1 275

48 850 32

425 16

0 0 2004 2005 2006 2004 2005 2006

part of the Aker Group Advancing its position

Aker Material Handling is improving its market position. The company is showing profitable growth and good development.

Aker Material Handling is one of Europe’s Aker Material Handling’s factory in Germany leading manufacturers and suppliers of has been upgraded for more efficient deli- high-quality, indoor logistics systems for offi- very of industrial shelving systems to Central ces, storage, and archiving. Production takes European markets. In 2006, investments were place at the company’s four modern factories: made in new equipment for more cost-effec- President and CEO Hallvard Muri two are in Germany, one in the Netherlands, tive production of shelving systems. The Nor- and one in Norway. wegian factory targets production of shelves 2006 key events Aker Material Handling has instituted a and racks for industrial storage facilities. detailed improvement program that has resulted in better performance. Revenues rose Rising steel prices 19 percent from 2005 to 2006. Aker Material Steel is the single most important input fac- ● Tragic accident Handling’s EBITDA more than doubled and tor for Aker Material Handling’s production. Aker Material Handling deeply regrets order intake increased by 20 percent in 2006. In 2006, steel prices continued to rise. To im- the tragic loss of an employee in a fatal At year-end 2006, Aker Material Handling prove its competitiveness, the company focu- accident at its factory in Germany in had 825 employees in Europe. The company sed strongly on developing cost-effective pro- 2006. The tragedy underscores the is wholly owned by Aker. The Aker Material ducts and flexible and custom-tailored solu- importance of continuing to focus on HSE measures and on continuous Handling Group is headquartered in Oslo, tions. Also, greater attention was directed at efforts to prevent injury. Norway. Aker Material Handling’s sales and purchasing raw materials and components distribution network comprises offices and from low-cost countries, China in particular. ● Profitable growth dealers in several European countries, in The above measures make Aker Material Aker Material Handling’s order intake addition to Algeria and the Middle East. Handling well equipped to meet market com- increased by 20 percent and its EBITDA petition. more than doubled in 2006. Strong brands At year-end 2006, most of the company’s Aker Material Handling markets and sells its markets are experiencing a favorable trend, ● Growth in order intake. Order intake in 2006 amounted to NOK products under well-known brand names. Con- particularly in Scandinavia and Germany. 1,670 million compared with 1,391 structor is used in the Scandinavian market. De- Going forward, implemented improvement million the previous year. The order xion enjoys a strong position in the European measures will yield positive effects, and Aker backlog is growing. market, especially in the UK. Bruynzeel is also Material Handling is expecting continuing firmly established in the European market. revenue and profit growth in 2007. Aker Material Handling’s sales organization custom-tailors systems for storage and archiving purposes in offices, archives, -sto An innovation winner rage facilities, distribution and logistics centers, and other settings. The company’s mobile and stationary shelving systems are adapted to individual customers’ needs in terms of office design and functionality. Archive sys- Aker Material Handling was the winner to mobile shelving systems production at the tems feature shelf-storage solutions in which in a major international innovation com- German factory, and to production of electri- petition held in October 2006. cally-powered mobile archiving systems at the shelving units are conveyed by electric drives. Netherlands factory. Shelves and racks for storage facilities can be At Orgatec — Europe’s largest trade show for In Germany, Aker Material Handling has equipped with conveyor belts, elevators, and office furniture and appointments held in Co- established a professional service organiza- other automated features. logne, Germany in October 2006, Bruynzeel tion to head installation work, improvements, won the Architecture and Office innovation and post-sales follow-up activities, work that in Efficient production award in the category “Products of high ar- the past was mostly performed by an in-sour- Aker Material Handling’s four factories are chitectonic value” for its Compactus® Office ced workforce. streamlined and adapted to regional markets. Electro cabinet system. The competition com- In 2006, Bruynzeel’s subsidiary in France prised 102 other products. opened a sales office in Algeria. After only a More than NOK 50 million has been inves- Aker Material Handling is targeting pro- few months in operation, the office had secu- ted in an automated production line for shel- duct development, innovation, and design. In red key projects and contracts in the Algerian ves and racks for the archive and office mar- 2006, significant improvements were made market. ket at Aker Material Handling’s factory in the Netherlands.

Aker ASA annual report 2006 35 Our business

Aker Capital

Aker Innovation has identified worthwhile contracting opportunities for maintenance and intervention work on subsea wells at offshore oil and gas fields.

36 Aker ASA annual report 2006 Our business

Aker Capital drove the development of Aker Floating Production

Actively creating value

Aker Capital is a tool for creating value far above the operating costs of its parent company, Aker ASA. In 2006, Aker Capital turned in another NOK billion-class profit.

Aker Capital is active on two fronts: Making Emergence equity investments and creating new compa- Aker Innovation promotes the emergence of nies. Aker Capital is a wholly owned Aker sub- new companies. sidiary. Current ideas and projects will become CEO Nils Are Karstad Lysø Aker Capital helps its parent company, the first-rate companies of the future. In the Aker ASA, actively own and develop invest- value-creating triangle — comprising Aker, Key 2006 events ments other than Aker’s several exchange-lis- Aker Kværner, and Aker Yards — people, ted companies. Aker Capital is designed to technologies, solutions, and financial clout create added value for shareholders that far combine to create innovative and future-ori- exceeds the costs of operating the parent ented companies. Aker Capital owns 67 per- ● Aker Capital was a key driver in the company, Aker ASA. cent of Aker Innovation, while Aker Kværner establishment of Aker Floating By developing the value of assets – often and Aker Yards each own 16.5 percent of the Production. The company is building a by seizing on specialized Aker know-how to company. fleet of production and storage vessels launch new companies or creatively assem- Business development will continue in for fast-track oil and gas field develop- ble resources – Aker Capital contributes to industries in which Aker companies possess ment. growing the value of Aker, supplementing particular innovation vantage points. ● Aker Capital served as an incubator for Aker’s interests in the listed Aker companies. Aker Exploration, helping to realize the Active investments offshore exploration company’s unique Value creation Aker Equity actively invests in companies with business idea and fund its start-up and The parent company had 2006 operating ex- significant development potential or that are growth. penses of NOK 131 million. However, in 2006, prime candidates for restructuring. Aker Capital realized approximately NOK 1.1 Aker Capital owns 67 percent of Aker ● Since the 2005 establishment of Aker billion in gains on its creation and incubation Equity; Aker Kværner and Aker Yards own the Capital, significant added value has been generated for Aker’s shareholders, of Aker Floating Production and Aker Explora- remaining 33 percent of this equity fund. Aker and new business opportunities have tion. Gains in 2005 were also on the order of Equity’s investment portfolio will amount to been created for other Aker companies. NOK 1 billion. approximately NOK 2 billion in 2007, up from Aker Capital’s value creation in 2005-2006 NOK 900 million at year-end 2006. corresponds to about ten times the cost of Chief among Aker Equity’s current share operating the parent company. Not included investments are the two listed companies Aker Capital is well positioned to generate in that comparison is Aker’s NOK 3.5 billion Bjørge ASA and Odim ASA. The ownership added value, particularly in businesses with gain on the establishment and subsequent stake in the oil services company Bjørge is which Aker is familiar. An industrial platform, share issue of the biotechnology and marine just short of 40 percent; the ownership inte- innovative thinking, technologies, and finan- ingredients company Aker BioMarine in 2006. rest in the offshore technology company cial clout are the factors on which Aker Capi- Odim is approximately 30 percent. tal adds value for Aker shareholders. State-of-the-art expertise Under the Aker Capital umbrella, Aker Asset Management manages a fund and pension New industrial projects assets for Aker companies’ employees in Nor- way. Aker Insurance Services, the insurance advisory firm, negotiates and selects life and non-life insurance for most Aker companies. Aker Oilfield Services is a product of a sea of opportunities – literally. As of the first quarter of 2007, Aker Capi- Aker’s value-creating triangle. Aker Oilfield Services, a new subsea well tal expertise will be further focused. New busi- maintenance and intervention services com- nesses will be intensified through the recently Active industrial ownership at Aker transla- pany, has been established together with established company Aker Innovation. Active tes into creating value by combining indus- DOF Subsea. First-rate solutions for both tra- investments in existing companies are con- trial platforms and technologies and matching ditional and light well intervention simplify oil ducted by Aker Equity (formerly Aker Invest). them with financial resources and innovative and gas well maintenance. capabilities. The cooperation among Aker Kværner, Aker Yards, and Aker Capital offers

Aker ASA annual report 2006 37 Our business

Health, safety and environment

Taking personal responsibility for HSE Our view is that even one accident or dangerous condition is one too many. Aker’s guiding principle is that all accidents are preventable. Taking care of health, safety, and environment (HSE) issues is a corporate core value, which commits each and every employee to promote better HSE performance through his or her daily actions. Aker Kværner Metals in Santiago received the Aker Kværner 2006 President’s Award for HSE excel- Attention to health, safety, and the environ- HSE factors is treated as a top priority in mee- lence for its Spence copper project in Chile ment – and profitability – are two sides of the tings, and backed up by managerial action. same coin. Excellent HSE performance is fun- Satisfaction with past HSE performance, damental for long-term value creation. Out- alone, is a breach of Aker’s core values. Aker standing HSE conditions secure competitive managers are regularly assessed as to their Health, safety, and environment: advantages, desirable workplaces, and sus- demonstrated HSE leadership. Continuous improvement tained profitability. This importance of HSE factors powers the Sharing experience Aker group’s continuous efforts to put a stop Each Aker company’s management team to incidents that can injure people, damage must increase the momentum of HSE efforts. property, harm the environment, or tarnish our A groupwide, shared approach to HSE issues, ● Employees’ health, safety, and working reputation. challenges, and improvements ensures better environment are priority concerns at performance in each area. Aker companies. Excellence in HSE Developing our HSE culture performance is a competitive Everyone reporting HSE on-site observa- advantage in our industries. Aker’s HSE culture is driven by ambitious tions, regular follow-up on reports, and the goals, decisive action, and individual com- sharing of experience among Aker’s leaders, ● Aker ASA, the parent company of the mitment – taking personal responsibility for help to ensure the appropriate focus on HSE, Aker enterprise, does not pollute the HSE and demonstrating concern for people, along with quicker achievement of further environment and drives global HSE the environment, and our business enterpri- improvements. An open attitude about HSE improvement, along with development ses. Our overarching goal is zero undesirable performance, undesirable conditions, health of environmental technology. incidents that can or do harm people, the en- hazards, accidents, and near-accidents ● Aker companies stay at the forefront, vironment, or property. Although serious acci- increases our chances of reaching our HSE implementing new technologies and dents regrettably do occur, we refuse to com- goals and also helps to foster constant impro- methods that reduce potentially promise our HSE zero tolerance goals. vement. adverse environmental consequences. Risk increases considerably when employ- Aker will continue to further develop a ees’ working procedures, safety equipment, strong HSE culture. Awareness and actions ● Environmentally advanced Aker or respect for HSE matters do not comply with among employees will strengthen Aker’s posi- projects include the Aker H-6e top standards. Accordingly, information about tion as an HSE leader. offshore drilling rig, Aker Kværner’s

technology for CO2 sequestration at gas- and coal-fired power plants, and the sustainable fisheries practices of Aker BioMarine and Aker Seafoods.

Work on health, environment, and safety has top priority at Aker – each and every day. Aker Yards’ HSE Step Change program was introduced in 2006 to improve HSE awareness, procedures, and expertise sharing

38 Aker ASA annual report 2006 Our business

Values are created through the interaction Human between individuals at each company but also Resources across the Aker group

People are the driving force

Aker’s achievements and profitability are generated by people who are willing to take on challenges and deliver solutions. Teamwork, know-how, and individual dedication spur the Aker companies to new levels of performance.

Aker is characterized by active ownership, as hening the reputation of Norway’s industrial of Aker, and showcasing of the Aker group to mandated by our shareholders. Operationally, enterprises – and Aker. The choreographed prospective employees, are expected to pay our approach ensures shared ownership of video and its lyrics dramatize former and cur- off when Aker companies are developing new the Aker group’s corporate values, goals, and rent Aker workplaces; the commercial was business activities in growth markets. strategies. ranked as the best-liked commercial film of Active ownership is about inspiring peo- the year. A recruitment campaign that was 2007 employee survey ple, it’s about putting the right person in the part of the project was continued in 2006 In 2007, Aker’s 55,000 employees in 45 coun- right place in the organization, and it’s about through new initiatives. Familiarity with Aker tries will be able to participate in Aker’s first providing the right frameworks and opportu- and its reputation has significantly facilitated groupwide employee survey. Global partici- nities. Values are created through the interac- recruitment by Aker companies. pation is expected to stimulate greater aware- tion between individuals – at each company, ness of and identification with our shared cor- but also across the Aker group. Trainee program porate values, promote development, and im- Cooperation, a key to Aker’s achievements, In the spring of 2006, Aker established an in- prove sharing of know-how and experience. works when we have forged a common Aker ternational trainee program. Initially, 12 indivi- Survey results will indicate the status of culture. Our shared culture also provides the duals were recruited from Brazil, China, Ma- Aker’s corporate culture and will point out backdrop for a variety of activities that strengt- laysia, and Russia. During three assignments development and improvement measures for hen Aker, such as recruitment, corporate pro- over two years, trainees will learn about Aker, priority areas. People are key to Aker’s perfor- filing, development of leadership tools, and its working methods, and its culture. mance and profitability. implementing systems for quantification, ana- The program’s goal is to ensure Aker com- lysis, and performance growth. panies’ access to highly qualified employees. The program will be expanded gradually to Shared values encompass more trainees. Better awareness In 2006, all Aker companies participated in a process aimed at identifying and formulating values that would be characteristic of every Aker company. It turned out that companies working in different industries had a great degree of commonality in values. The Aker values unify us and promote a culture aimed at long-term value creation.

Leadership development Good leadership plays an important part in Aker’s strong performance. Thus, we are ag- gressively targeting leadership development. In 2006, a careful, in-depth survey and assessment of top-management’s qualities and performance in all Aker companies were performed for the first time. Adherence to our values, goal achievement, potential, and maturity were surveyed among nearly 250 managers. Each manager’s progress and potential at his or her Aker company was evaluated using a groupwide human resources tool that helps ensure quality and continuity in management positions.

Breaking the mold TV ad Aker’s 2005 TV commercial Breaking the Different countries, different cultures, different people, and different perspectives — many Aker people are mold since 1841, achieved its goal of strengt- willing to relocate temporarily to a foreign land

Aker ASA annual report 2006 39 Our business

Corporate responsibility

Sustainable development Our commitments Aker was founded in 1841, however several of the company’s businesses existed in the 1700s and were a driving force in the industrialisation that took place in the UK and Scandinavia. The group is recognised as a Our commitments towards our customers, shareholders, employ- cornerstone company in many communities in Norway and abroad. ees and the societies in which we operate: Aker companies, which are present in 45 coun- ble business environment. We therefore strive tries, provide important employment opportu- to maintain high ethical standards. We build a Our customers should expect: nities and economic stability for many local ci- culture that values honesty, integrity and trans- ● A strong HSE performance ● To be listened to and understood tizens in the communities in which we operate. parency, and we encourage the same behaviour ● A competitive delivery, on time and However, our most important corporate respon- among our partners. with the right quality sibility is to provide our products and services Community: As a large company, we are a sig- ● An open, long term and mutually in a socially, environmentally and ethically re- nificant part of the societies in which we operate, beneficial relationship sponsible way. A good result on the financial bot- both locally and globally. We believe in playing ● High standards of ethical behaviour tom line is not sustainable or acceptable if it is our part in the community through investments in and integrity achieved at the expense of people or the envi- maintaining a healthy, stable society. ronment. These principles guide our work on many Our shareholders should expect: ● To be part of an active and value It is our history and our values, as well as the fronts – locally, nationally and globally – to creating ownership, full of energy and inspiration of international norms such as the create win-win situations for the community, the determination UN Global Compact, Global Reporting Initiative company’s employees, shareholders, and other ● A positive, long-term share price (GRI) and OECD Guidelines that guide us in our stakeholders. However, there are two areas in development and value growth corporate responsibility (CR) practices globally. corporate responsibility that are particularly chal- ● An administration that is “hands-on” We have summarized these guidelines into four lenging and important to us: Entry into new and delivering strong financial returns guiding principles: emerging markets, and environmental protection ● Transparency – precise, timely and consistent reporting of figures People: A competent and motivated workforce, and sustainable development. ● Good corporate governance driving toward the same goals is vital to our Our contribution to society is dependent on success. With thousands of employees around our ability to comply with our corporate values Our employees should expect: the world representing many cultures, religions and maintain our standards in all the countries in ● A safe, healthy and inspiring work and ethnic groups, our focus is to help each indi- which we operate. This requires developing an environment vidual employee realise his or her potential and understanding for different cultures and settings, ● Challenging work assignments and look after his or her own health and safety. All our communicating our own values at the same time opportunities for development efforts are guided by a commitment to protec- as we respect and learn in each new market that ● A tolerant work place where diversity is considered a positive contribution ting the human rights of our employees and of we enter. to the organisation the stakeholders we influence. Our expertise makes us able to develop ● Competitive compensation, relative to Environment: The environment depends on increasingly energy-efficient and environmentally the markets in which they do work companies like ours to contribute to its positive friendly solutions. Ensuring that we, through ope- ● To be treated fairly, with respect and development. We therefore work to minimise nerations and product development, do our best to integrity. gative impact on the environment by continu- contribute to sustainable development is vital to ously developing technologies, practices and our continued growth, especially in the areas of The societies in which we operate should expect: business opportunities compatible with sustai- environmental protection and climate change. ● Local and regional value creation nable development. We try to – responsibly – create long-term ● Respect for local people, laws and Integrity: We depend on a reliable, predicta- value. cultures ● Value adding relationships with local partners and subcontractors Concern for people ● Socially responsible business conduct, integrity and high ethical standards ● An open agenda – transparency and reliability Aker Kvaerner Subsea in Curitiba, Brazil, meets expanded staffing needs at both factory and offices by implementing a working environment that has generated greater motivation, reduced stress, and lowe- red sick leave rates. The Brazilian company was awarded Aker Kvaerner’s 2006 Health Program Prize.

40 Aker ASA annual report 2006 Our business

Worldwide, Aker is involved in support for its local communities

Local cornerstones Sustainable fisheries

Aker companies in Norway and world- Ingebrigtsen, a former government minister Fish and krill are renewable resources. wide are often cornerstones of their of social affairs, has followed the develop- Aker Seafoods and Aker BioMarine ma- local communities; as such, they seek ment of Aker Seafoods over a period of se- nage resources for the sake of future ge- long-term value creation for the com- veral years. nerations. munities they are a part of. “I live just a stone’s throw from the factory, To ensure sustainable management of and I know many of the people who work at our oceans’ resources, these Aker Group Vestvågøy, a municipality in the northern Nor- Aker Seafoods. It seems to me that Aker Sea- companies are working hard on seve- wegian county of Nordland, is a community in foods is a good employer. Employees are ral fronts. This environmental involvement growth. Aker Seafoods, located in Stamsund, satisfied and talk about a good working envi- also contributes to ensuring sustainable a fishing community within Vestvågøy munici- ronment. The company focuses on keeping communities along Norway’s coastline. pality, is the largest private-sector employer in employees competent and helping them to Harvesting quotas are necessary the Lofoten archipelago. Vestvågøy’s mayor, stay healthy,” says Ingebrigtsen. to prevent over-fishing. In addition, it is Guri Ingebrigtsen, refers to the company as She adds, “From the perspective of the important to prevent illegal fishing, which a local cornerstone and an industrial driver in municipality, we have noted that the company is a danger to our resource base. Aker the municipality. has gone to great lengths to offer work to refu- Seafoods has long been a driving force “Aker Seafoods buys raw materials year gees who have settled here; that’s important to in efforts to put a stop to illegal fishing, a round. This is important to the other fishe- us in our efforts to integrate refugees. For the major challenge for the entire industry. ries reception facilities in our region. The term local community, Aker Seafoods really is a cor- The company has implemented in- industrial driver means that smaller-sized nerstone. Stamsund is flourishing, and much house instructions for raw materials reception facilities in nearby local communi- of that is due to high activity levels at our fis- purchases to prevent raw materials of ties have a more solid foundation for survival,” heries companies. Their future development unknown origin entering the company’s says the mayor of Vestvågøy Guri Ingebrigt- of production methods and products will also value chain. The introduction of stricter sen, of the Norwegian Labor Party. benefit the municipality.” purchasing rules will make it more difficult to sell illegally caught fish that compro- mise the principles established for legal quotas. Aker works with World Wildlife Fund (WWF) on a sustainable fisheries industry, it is also represented on the Advisory Board of the global organization the Marine Stewardship Council (MSC), which works to prevent over-harvesting through environmental labeling of fisheries. Aker also cooperates with Greenpeace and other organizations working to promote sustainable development in the fisheries industry.

Concern for society

Worldwide, Aker is involved in support for its local communities. Some examples are Aker Kværner’s support for The Uni- ted Way in the United States, orphanages in eastern Russia, and Red Cross emer- gency aid programs. These contributions are designed to help Aker Seafoods is a local cornerstone and an industrial the neediest. Aker’s involvement also has a driver in the municipality, says mayor Guri Ingebrigtsen positive impact on employee morale, per- to Aker Saefoods’ CEO Yngve Myhre sonal development, and workplace pride. It may also contribute to greater interest by potential employees and to attracting partners and customers with similar attitudes.

Aker ASA annual report 2006 41 Board of Directors’ report

Board of Directors’ report

Another good year Aker continued its favorable development in 2006. Revenues amounted to NOK 80 billion, up 38 percent from 2005. Operating profit (EBITDA ) for the year was NOK 4.3 billion, an increase of 43 percent compared with 2005. As of 31 December 2006, Aker’s order backlog stood at NOK 144 billion, up NOK 50 billion from year-end 2005.

The positive trend in operations at Aker’s main has direct and indirect shareholdings in several The following two Aker companies are primarily companies continued in 2006. Their develop- listed companies. active in maritime industries: ment – together with Aker’s ability to identify new Technology, know-how, and experience are industrial projects and turn them into profitable key pillars of Aker’s industrial activities. The Aker Yards – Europe’s largest shipyard group, enterprises – have materialized as the year’s va- development and application of new technolo- with 17 shipyards in seven countries. Aker Yards lue growth of Aker companies: The market capi- gies and working methods provide the Group is organized into three core business areas: talization of the exchange-listed assets of the with an important competitive edge. A sig- Cruise & Ferries, Merchant Vessels, and Off- parent company Aker ASA at year-end 2006 nificant proportion of the Group’s research, shore & Specialized Vessels. was approximately NOK 36 billion, up from NOK development, and innovation takes place as 19 billion a year earlier. part of the execution of contracted projects, in Aker American Shipping – Builds and owns The solid financial position at year-end close cooperation with customers, such as shi- vessels that operate between US ports in the 2006 and a significant cash position, which powners and oil companies. so-called Jones Act market. Currently building was further enhanced in early 2007, enable The following Aker companies are primarily a series of 16 product tankers that have all been Aker ASA to continue its targeting of industrial engaged in energy-industry projects and deli- chartered under long-term agreements. The first development. The company is also seeking to veries: of the vessels in the series was delivered in Fe- provide shareholders with greater predictabi- bruary 2007. lity as to future dividends in line with Aker’s divi- Aker Kværner – Global supplier of technology- dend policy. based products and engineering, construction, The following two Aker companies are engaged The Board of Directors of Aker ASA will pro- and related services. A leading provider of in harvesting and processing of seafood and pose to the company’s 29 March 2007 annual sha- technology and systems for oil and gas explora- other marine bio-resources: reholders’ meeting that a per-share dividend of tion and production. Aker Kværner designs and NOK 19.00 be paid for the 2006 accounting year. delivers major projects for customers in the pe- Aker BioMarine – Harvests and processes ma- trochemical, chemical, power generation, me- rine resources, and develops and sells high-va- Group activities and location tals, and mining industry. lue end products to the aquaculture, food, and Aker ASA’s corporate mission is to create lasting in time, the pharmaceuticals industry. Aker value for its shareholders and other stakehol- Aker Drilling – Owner and operator of two ad- BioMarine was not a designated Aker Group re- ders by building first-rate companies in indus- vanced, sixth-generation drilling rigs for deep- porting segment in 2006. trial sectors in which the Aker Group possesses water deployment and drilling under harsh great expertise and execution ability. Aker crea- weather conditions. The rigs, which are being Aker Seafoods – Fishes under 28 trawler licen- tes new companies and develops them by exer- built by Aker Kværner, are scheduled to enter ses and operates a fleet of 14 vessels in Norwe- cising active ownership. When development of operation on the Norwegian continental shelf in gian waters. Processes mainly cod, saithe, and a company has progressed to the appropriate April and October of 2008. Aker Drilling was not haddock at its facilities in northern Norway and stage, Aker will invite outside investors to join as a designated Aker Group reporting segment in Denmark for sale to food retail chains in Scandi- co-owners – or facilitate transferring ownership 2006. navia and northern Europe. to new owners. Aker ASA is Aker’s parent company, and has Aker Floating Production – Establishing a Aker’s other activities comprise the following its activities in Norway. Aker comprises several fleet of four vessels for offshore oil and gas pro- main business units: dozen wholly and partly owned operating com- duction and storage. Three hulls have been pur- panies and a number of industrial and financial chased and are being converted. The first Aker Aker Material Handling – Develops, manufactu- ownership interests with activities worldwide. Smart FPSO (floating production, storage, and res, and sells shelving, storage, and archive sys- Aker’s business activities are primarily directed offloading) vessel will begin operations under tems for use in industrial and office environments; at energy, maritime, and marine industries. contract in India in 2008. most sales are in Europe. Products are marke- In addition to the parent company, Aker com- ted under recognized brand names such as Con- prises six listed main companies and two com- Aker Exploration – A skilled partner in the se- structor, Bruynzeel, Compactus, and Dexion. panies for which stock-exchange listing is plan- arch for new oil and gas resources on the Nor- ned for the first half of 2007. The six listed com- wegian continental shelf. The exploration com- Aker Capital – Owns and develops industrial and panies are Aker Kværner, Aker Yards, Aker Dril- pany drills wells in exchange for ownership inte- financial assets that are not included among Aker ling, Aker Floating Production, Aker Seafoods, rests in offshore field licenses. Ideally suited rigs main companies. Comprises ownership interests and Aker American Shipping. Stock-exchange are available via a long-term charter agreement in Aker Exploration and the listed companies listing is planned for Aker BioMarine and Aker for use of one of Aker Drilling’s semi-submersi- Bjørge and Aker Drilling, and an indirect owners- Exploration. Aker Material Handling and Aker ble platforms. Aker Exploration was not a desig- hip stake in Odim. Aker Capital is not a designa- Capital are wholly owned by Aker. Aker Capital nated Aker Group reporting segment in 2006. ted reporting segment of the Aker Group. Aker

42 Aker ASA annual report 2006 Board of Directors’ report

Capital’s profit and loss account and balance Presentation of accounts intake was NOK 47.9 billion, up from NOK 32.1 sheet are included in the accounts of Aker ASA . The 2006 consolidated accounts of the Aker billion in 2005. The shipyard group’s order back- Group show operating revenues of NOK 79 892 log as of 31 December 2006 was a record-high Key 2006 events million. The Group’s operating profit before de- NOK 79.4 billion. Pursuant to the company’s business mission, preciation and amortization (EBITDA) amounted Aker Yards completed major acquisitions in Aker ASA has created significant shareholder va- to NOK 4 280 million in 2006. Operating pro- France, Ukraine, and Norway in 2006. In France, lue in 2006 by establishing new companies. Non- fit after depreciation and amortization (EBIT) Aker Yards acquired the two yards belonging to Group investors were invited to become share- amounted to NOK 3 509 million. the French Alstom group. The Saint-Nazaire yard holders of Aker Floating Production, Aker Explo- Pre-tax profit for 2006 amounted to NOK is one of the world’s largest cruise ship builders. ration, and Aker BioMarine (see below). The mar- 2 879 million, after net financial items of minus The yard acquisition in Ukraine secured access ket capitalization of these three companies at NOK 1 178 million, and NOK 548 million in other to key steel-building capacity. Newly acquired year-end 2006 amounted to NOK 7.9 billion; Aker income. The latter figure is attributable to a gain Aker Florø shipyard in Norway is a world leader ASA’s share of this amount was NOK 5.2 billion. associated with the establishment of Aker Floa- in stainless steel tankships. The Ukraine and ting Production and Aker Exploration. Norway yard acquisitions have expanded both Aker Floating Production was listed in the sum- Tax expense amounted to NOK 748 million. production capacity and the Aker Yards group’s mer of 2006 following a USD 150 million share After-tax profit on continued activities for 2006 product range for merchant marine vessels. issue, to which Aker contributed USD 10 million. was NOK 2 131 million. Aker Yards’ board of directors will propose Before the share issue, the market had priced Net after-tax profit from activities held for to the company’s 29 March 2007 annual share- Aker’s ownership interest in Aker Floating Pro- sale (Aker Kværner’s Pulping & Power business holders’ meeting the payment of a NOK 18 per- duction at approximately NOK 800 million. At lis- area), amounted to NOK 1 811 million. The total share dividend for 2006. Aker’s income from the ting, Aker owned 48.4 percent of Aker Floating net profit from continued and discontinued acti- dividend would amount to NOK 164 million. Aker Production stock. Subsequently, Aker has increa- vities amounted to NOK 3 942 million in 2006, Yards’ board has also proposed a 1:5 split of sed its ownership to 50.1 percent by acquiring compared with NOK 2 590 million in 2005. the company’s shares. Aker Floating Production shares in the market. Pursuant to section 3-3a of the Norwegian accounting act, the Board confirms that the Aker American Shipping’s 2006 operating re- Aker BioMarine has been developed through a 2006 annual accounts have been prepared venues declined by 86 percent, compared with targeted restructuring of Aker’s international fis- based on the assumption of a going concern. 2005; EBITDA was 75 percent below the cor- heries activities. In December 2006, Aker BioMa- responding 2005 figure. The profit and EBITDA rine completed a NOK 1.2 billion share issue; at Segment information decline is attributable to delivery of the fourth that time, Aker’s 76.2 percent ownership interest Aker Kværner’s operating revenues rose by 37 and final vessel in a series of containerships to in Aker BioMarine was valued at NOK 3.9 billion. percent to NOK 50.6 billion in 2006. The group’s Matson Navigation, which took place in the third Aker BioMarine shares trade on the OTC list of operations developed favorably, and EBITDA for quarter of 2006. the Norwegian Security Dealers Association. In 2006 was NOK 2 872 million, up from NOK Aker American Shipping’s Philadelphia, USA, the fall of 2006, Aker acquired a majority sha- 1 816 million in 2005. shipyard is currently building a series of pro- reholding in the listed biotechnology company Demand for products and services delive- duct tankers for American Shipping Corporation, Natural ASA. The boards of directors of Natural red by Aker Kværner continued to rise in 2006. a subsidiary of Aker American Shipping. Thus, and Aker BioMarine have agreed to propose a The company had a 2006 order intake of NOK revenues associated with the construction of merger between the companies, with Natural as 62.3 billion, up from NOK 51.9 billion in 2005. the product tankers are eliminated in Aker Ame- the acquiring company. The merged company The order backlog as of 31 December 2006 was rican Shipping’s consolidated accounts. will be called Aker BioMarine. Plans are to com- a record-high NOK 59.7 billion. The product tankers will be chartered to Aker plete the merger in June 2007; the merged com- Operating revenues and operating profit American Shipping’s partner, Overseas Shiphol- pany will continue Natural’s current listing on the from the divested Pulping & Power business ding Group. The first of the vessels in the series Oslo Stock Exchange. are not included in the above figures. Pulping & was delivered in the first quarter of 2007. Aker Power’s net operating profit after financial items, American Shipping’s operating revenues and Aker Exploration raised NOK 1.37 billion in De- including the gain on the sale of the activities, profit will increase as charter income is- recei cember 2006 by issuing shares and convertible amounted to NOK 2.5 billion. ved for the product tankers delivered by the Phi- bonds; Aker contributed about NOK 300 million Aker Kværner strengthened its financial ladelphia yard. of this amount. Before the issue, the market had position through a comprehensive refinancing Aker American Shipping’s year-end 2006 priced Aker’s ownership stake in Aker Explora- completed in the fourth quarter of 2006. Out- order backlog comprised a series of ten product tion at approximately NOK 305 million. Aker cur- standing debt and bond loans were replaced by tankers; the value of the order backlog was NOK rently holds just under 50 percent of Aker Ex- a new EUR 750 million bank loan and four new 4.1 billion. In February 2007, Aker American Ship- ploration shares. The exploration company has bond loans totaling NOK 1.6 billion. ping and Overseas Shipholding Group reached chartered one of Aker Drilling’s drilling plat- Aker Kværner’s board of directors will pro- agreement on a letter of intent to build an additio- forms and has secured farm-in agreements for pose to the company’s 29 March 2007 general nal six product tankers of the same series. two licenses on the Norwegian continental shelf. meeting that an extraordinary per-share divi- No dividend payment by Aker American Aker Exploration is planning stock-exchange lis- dend of NOK 30 be paid as a result of the Pul- Shipping has been proposed for the 2006 acco- ting in the first half of 2007. ping & Power divestiture and that an ordinary unting year. In April 2006, Aker helped the company TH per-share dividend of NOK 10 be paid for the Global to enter into a final agreement on - pay 2006 accounting year. Aker’s share of this divi- Aker Seafoods had revenues of NOK 2 120 mil- ments to the former Kværner corporation’s pen- dend disbursement would amount to NOK 882 lion in 2006, compared with NOK 1 953 million in sion fund in the UK. million. 2005. EBITDA for 2006 was NOK 195 million, up Aker’s contribution to the agreement is to Aker Kværner’s board will also propose to NOK 18 million from 2005. Figures for 2005 are convert an unsecured receivable that is payable the company’s general meeting the initiation of adjusted for the sale of the Nordic Group, which by the TH Global Group into a future option to a a share repurchase program, under which up to was completed in 2006. minority interest in the holding company TH Glo- 10 percent of Aker Kværner stock may be repur- Aker Seafoods’ harvesting activities con- bal. Aker further agreed to either acquire or by chased and a one-to-five share split would be tinued their positive development throughout other means contribute to TH Global’s divesti- completed. 2006. Demand for high-quality seafood raw ture of business activities totaling GBP 11.7 mil- material was strong, and prices in the first-hand lion. The agreement also enabled Aker Kværner Aker Yards’ operating revenues increased by market were favorable. Aker Seafoods has wor- to secure some 1,300 skilled personnel for its 56 percent to NOK 25.9 billion in 2006. The ked systematically to obtain steady, adequate resource base in the UK from TH Global. group’s operations developed favorably, and access to fish year round, overcoming traditi- The agreement with TH Global resulted in EBITDA for 2006 was NOK 1.4 billion, up from onal seasonal variations in Norway’s fisheries. a NOK 260 million negative profit effect in the NOK 1.0 billion in 2005. The results of these efforts have emerged as parent company accounts of Aker ASA and hol- Market demand for vessel newbuildings con- stronger profits, particularly in the second half ding companies. tinued to rise in 2006. Aker Yards’ 2006 order of 2006. The company’s targeting of fresh sea-

Aker ASA annual report 2006 43 Board of Directors’ report

food products delivered to European markets Aker ASA and holding companies received NOK tive communication is stressed by Group com- also has paid off. 390 million in dividends and Group contributions panies. It is important that any deviations from In 2006, Norwegian regulatory authorities in 2006. Other financial expenses amounted to plans, specifications, or expected performance introduced stricter requirements as to proces- NOK 113 million in 2006, and exceptional finan- are identified quickly, so that corrective measu- sing of catches covered by port-of-landing obli- cial items amounted to minus NOK 611 million; res can be taken at an early stage, thus limiting gations. Stricter requirements will not adversely of this amount, NOK 260 million is attributable the consequences of such deviations. affect Aker Seafoods’ profitability. Independent to the write-down of a receivable payable by TH Aker companies adhere to a rigid risk policy of regulatory requirements, Aker Seafoods’ goal Global. to minimize exposure to financial-market risk, is to process a significantly higher proportion of The 2006 annual accounts of Aker ASA and such as foreign exchange, interest, and counter- raw materials than the 70 percent stipulated by holding companies show an ordinary net profit party risk. A further discussion of risk is presen- regulatory authorities. of NOK 4 129 million. ted in Note 35 to the consolidated accounts and Norwegian authorities were still processing in Note 14 of the parent company accounts. several legislative measures in 2006 that may The balance sheet for the parent company Aker affect Aker Seafoods’ future earnings. Pending ASA and holding companies that are part of the Events after the balance sheet date a final clarification, it is difficult to clearly estab- parent company structure (parent and holding In January 2007, Aker sold shares, reducing its lish the potential operational and financial con- companies) expresses the parent company ownership interests in both Aker Kværner and sequences of these matters. structure’s total liquidity, receivables, and liabi- Aker Yards to 40.1 percent. The share divesti- Aker Seafoods’ board of directors has pro- lities of the listed companies and other operatio- ture freed up NOK 4.7 billion in cash, and ge- posed that a per-share dividend of NOK 0.75 be nal companies of the Group. nerated a NOK 3.5 billion accounting gain for paid for 2006. Aker’s share of the dividend dis- Parent and holding companies’ cash Aker ASA. bursement would amount to NOK 24 million. and short-term interest-bearing receivables The stronger balance sheet and greater finan- amounted to NOK 2 586 million at year-end cial clout provide Aker with capacity for further Aker Floating Production was established as 2006, compared with NOK 3 265 million a year industrial moves in existing business activities an independent company in 2006. Aker Floating earlier. Gross debt increased from NOK 2 173 and new projects. Aker shareholders will bene- Production is in a build-up phase; the company’s million to NOK 3 638 million during the year, of fit from increased predictability regarding future 2006 operating revenues of NOK 6 million came which a new bond loan issued in the fall of 2006 payments, which will be made in accordance from chartering one of the company’s three tan- amounted to approximately NOK 1 billion. Intra- with the company’s established dividend policy. kers as a storage vessel. group debt to subsidiaries amounted to NOK In the first quarter of 2007, Aker Capital In January 2007, Aker Floating Production 197 million at the close of 2006. established a new legal structure that under- signed a letter of intent with a customer in India Aker ASA and holding companies’ net inte- scores the company’s role in developing the to charter one of the company’s offshore pro- rest-bearing receivables as of 31 December underlying values of Aker ownership interests in duction and storage vessels. Based on a five- 2005 amounted to NOK 1 092 million. At year- industrial holdings and fosters the identification year leasing period, a final contract will gene- end 2006, the corresponding figure was a net and development of new projects. rate total charter revenues for Aker Floating Pro- interest-bearing debt of NOK 1 052 million. The A new company, Aker Innovation was estab- duction on the order of USD 600 million. The ves- equity ratio decreased from 73 percent at year- lished in the first quarter of 2007 to identify sel will be converted into an Aker Smart FPSO end 2005 to 68 percent as of 31 December and develop new projects among its three co- and ready for chartering in February 2008. 2006. owners: Aker, Aker Kværner, and Aker Yards. No dividend for 2006 has been proposed by Aker ASAs unrestricted equity that may be Aker owns 67 percent of Aker Innovation, while Aker Floating Production. used for dividend distribution amounted to NOK Aker Kværner and Aker Yards each own 16.5 6 672 million as of 31 December 2006. percent of the company. Aker Material Handling increased its operating The Board will propose to the company’s The former Aker Invest, which had been revenues by 15 percent in 2006 to NOK 1.6 bil- 29 March 2007 annual shareholders’ meeting owned 60/40 by Aker Capital and Aker Yards, lion. Operations continued to improve throug- that an ordinary dividend of NOK 2 181 million will be restructured into Aker Equity Fund I, a hout 2006. EBITDA for the year was NOK 75 mil- be paid for the 2006 accounting year. The total fund co-owned by Aker, Aker Kværner, and Aker lion, more than a doubling compared with 2005. dividend disbursement would correspond to a Yards. Plans are for Aker Equity Fund I owners- Aker Material’s main markets in Scandina- per-share dividend of NOK 19. Of the total divi- hip to be identical to that of Aker Innovation. via, the UK, and Central and Northern Europe dend disbursement, the company Aker Maritime developed favorably in 2006. Order intake in Finance will receive NOK 806 million. Aker Mari- Health, safety and environment 2006 was NOK 1.7 billion, compared with NOK time Finance is a wholly owned subsidiary of the Employee health and the working environment 1.4 billion in 2005. The year-end 2006 order Aker Group and owns all Class B Aker shares. are major areas of concern and the object of backlog stood at NOK 386 million. significant attention throughout Aker. In some No dividend for 2006 has been proposed by Financial risk and risk management industries excellent health, safety, and environ- Aker Material Handling. Aker ASA and individual Group subsidiaries are mental performance constitutes a key competi- exposed to various forms of risk and uncertainty, tive advantage. The sick leave rate among Aker Parent company and holding such as market risk, risk relating to operations, Group employees in 2006 was 3,2 percent, a companies accounts counterparty risk, and other financial-market decrease from 3,8 percent in 2005. The frequ- The profit and loss account for the parent com- risks. ency of lost-time injuries (the number of injuries pany Aker ASA and holding companies that are A major part of Aker ASA’s assets are in sha- that resulted in lost working time per million wor- part of the parent company structure (parent res of listed companies. The values of these king hours) was 6,6 in 2006, compared with 6,5 and holding companies) expresses the parent assets vary with developments in the individual in 2005. company’s ability to create added value for Aker companies and with stock market fluctuations in In 2006, eleven individuals died in work-re- ASA’s shareholders beyond balance sheet values. general. lated accidents. Four of the fatalities were pas- Parent and holding companies’ 2006 opera- The activities of Aker Group companies sengers in a chartered airplane that crashed ting revenues amounted to NOK 4 643 million, and their main markets are described in grea- during landing. One person was killed in an ass- largely as a result of the establishment of Aker ter detail above. By and large, their markets are ault. The other accidents occurred during work Floating Production, Aker BioMarine, and Aker characterized by favorable underlying trends. at Aker facilities or workshops. The Board dee- Exploration. The corresponding 2005 figure was Good risk management is a core compe- ply regrets these tragic losses of life and ex- NOK 1 613 million. tence of Aker Group companies, which make presses its deep-felt sympathy to family mem- The revenue increase is attributable to systematic efforts to manage risk to protect their bers and colleagues of the deceased. higher activity levels and a number of busi- operations and ensure that projects are delive- The Board has noted that all serious acci- ness development projects in 2006. The change red in accord with contract specifications and dents have been followed up by thorough inves- in activity levels from 2005 to 2006 is reflec- frameworks. tigations. The sequence of events has been ted in the parent company’s operating expen- Group companies have implemented sound, documented and improvement measures asses- ses, which rose 27 percent to NOK 131 million comprehensive risk management systems sed and implemented. in 2006. and procedures. Maintaining open and effec- The parent company’s activities do not have

44 Aker ASA annual report 2006 Board of Directors’ report any detrimental environmental effects. Regular wishes to be an attractive workplace for both In elections, Aker employees appoint four re- operations of individual Aker Group companies women and men, regardless of ethnic origin, presentatives to Aker ASA’s Board of Directors. have only limited adverse environmental effects cultural background, religion, political persua- Three of these representatives have their day- under normal operations. No material acciden- sion, or age. to-day work at Aker Kværner and one works for tal emissions to the environment were reported Aker’s main business activities are public limi- Aker Seafoods. Members of the Board of Direc- in 2006. ted liability companies and thus subject to Nor- tors and Group management are presented on Increasingly, attention to health, safety, and wegian regulations pertaining to gender equa- the company’s webpages and from page 122 of environmental concerns has become a key lity on corporate boards of directors. As an influ- this annual report. competitive advantage for Aker companies. The ential shareholder in several stock-exchange lis- Internal control at Aker ASA takes place via various business units strive to stay in the fore- ted companies, Aker ASA has worked with these detailed budget follow-up; regular, thorough front, developing and implementing new tech- companies’ nomination committees to ensure cost control; and procedures for certifying pay- nology and methodologies that help to reduce that the companies meet legal requirements by ments. the potentially adverse effects of their activities established, applicable deadlines. KPMG is Aker ASA’s independent auditor. – and the activities of their customers. Examples Two of seven shareholder-elected Aker Fees for regular audit services and other audit are the environmentally friendly Aker H-6e dril- board members are female. Under Norwegian services are detailed in the notes to the parent ling rigs for Aker Drilling under construction at law, the number of female board members must company accounts. Aker Kværner, Aker Kværner’s technology for be increased to no fewer than three by year-end CO2 capture from gas- and coal-fired power 2007, provided the total number of board mem- Outlook plants, and the sustainable fisheries of Aker bers remains unchanged. The four board mem- A significant part of the Group’s activities de- Seafoods and Aker BioMarine. bers elected by and among employees are men. pends directly or indirectly on developments in There are no women in Aker ASA’s Group mana- the world’s energy markets, global commerce, Organization gement. and the travel industry. The underlying trends in Aker’s goal is to be recognized as the prefer- these segments continue to be positive. red partner for its employees and business as- Corporate governance Aker Kværner, Aker Drilling, Aker Floating sociates, and to be a respected corporate citi- Good corporate governance, that is, proper Production, Aker Exploration, and some Aker zen. Over time, profitability is vital to achieving board conduct and company management, are Yards activities make substantial deliveries to this goal. key to Aker’s efforts to build and sustain trust. the oil and gas industry. Anticipated general Aker will be recognized for what Group com- Aker companies are committed to maintaining demand growth and requirements for technolo- panies and their employees deliver in terms of an appropriate division of responsibilities bet- gies to increase oil recovery from mature oil and services, products, and profits. However, the ween the company’s governing bodies, its gas fields, are fundamental driving forces affec- manner in which our companies deliver what is Board of Directors, and management. ting these business activities. asked of them is equally important. Long-term Aker has compared the Norwegian recom- Aker American Shipping and Aker Yards and mutually beneficial relationships with -soci mendations on corporate governance for lis- deliver vessels for seaborne transportation, and ety at large generate lasting value. ted companies with the Group’s own corporate Aker Yards is a preferred supplier of cruise The companies that comprise the Aker governance procedures and practice. The fin- ships for the travel industry. From Aker’s per- Group had a total of 46 255 employees at year- dings show that, by and large, the two sets of spective, market developments in both these end 2006, of whom 13 837 worked in Norway, guidelines are in agreement. There are some industries are favorable. 12 630 in EU, and 7 246 in North America, pri- differences, which are presented on page 120 For Aker Seafoods, the increased demand for marily in the United States. In addition, there are of this report. The Board regards these differen- fresh seafood products in the European market employees of associated companies and con- ces as minor. is an important factor. Aker BioMarine, with its tract employees working on projects. Through his companies, Kjell Inge Røkke targeting of bioactive ingredients based on krill A common feature of most Group activities owns 67.8 percent of Aker Class A voting-rights oil, is well positioned as to the expected growth in recent years is that deliveries demand sig- shares. Mr. Røkke is nomination committee in market demand for nutraceuticals, food addi- nificantly higher levels of expertise. Also, the chairman of Aker ASA. He contributes actively tives, and specialty aquaculture fodder. participation of partners and subcontractors to the development of the Group as an advisor Aker American Shipping, Aker Drilling, Aker is increasingly important to project execution, to individual projects. Aker ASA and individual Floating Production, Aker BioMarine, and Aker which often takes place at facilities that are dis- Aker Group companies regard proximity to such Exploration are all companies that were estab- tant from the Group’s own production sites. proactive ownership important to value creation lished in the past 12 to 18 months. Although the Consequently, it is important that Aker Group and fully in accord with good corporate gover- financial and operational basis for these compa- companies attract and retain solid, competent nance. nies has been established, the companies are employees, and enrich employees’ know-how The company’s nomination committee, board still in a build-up phase. via challenging work assignments and syste- chairman, and shareholder-elected directors Aker is well prepared to take advantage of matic development. These are priority tasks at are elected by the company’s annual sharehol- these fundamentally positive conditions and Aker, and Aker companies cooperate in areas ders’ meeting. At the company’s annual share- envisions continued growth and improved mar- such as human resources development, orga- holders’ meeting in March 2006, Hanne Harlem gins in all main companies. However, the acco- nizational development, recruitment, and corpo- was elected new board member. There were no unts of the Aker Group will be significantly chan- rate profiling. other changes in the composition of the Board ged as of 1 January 2007 since the two largest Aker considers diversity a positive contribu- of Directors in 2006. business activities, Aker Kværner and Aker tion to any organization. Accordingly, the Group Yards, will no longer be consolidated.

Oslo, 28 February 2007 Board of Directors Aker ASA

Leif-Arne Langøy (sign.) Lone Fønss Schrøder (sign.) Bjørn Flatgård (sign.) Kjeld Rimberg (sign.) Board Chairman Deputy Board Chairman

Jon Fredrik Baksaas (sign.) Kjell A. Storeide (sign.) Hanne Harlem (sign.) Atle Tranøy (sign.)

Harald Magne Bjørnsen (sign.) Bjarne Kristiansen (sign.) Stein Aamdal (sign.) Bengt A. Rem (sign.) General Manager

Aker ASA annual report 2006 45 Annual accounts

Annual accounts

46 Aker ASA annual report 2006 Annual accounts

Contents Page Note Page Note Aker Group Parent company Aker ASA 48 Profit & Loss 96 Profit & Loss 49 Balance sheet 97 Balance sheet 50 Changes in equity 98 Cash flow statement 51 Cash flow statement 99 Accounting principles and estimates

52 1 Accounting principles and estimates 100 1 Salaries and personnel expenses 57 2 Business combination 100 2 Fees to auditors 61 3 Discontinued operations 100 3 Gain /loss on disposal of fixed assets 62 4 Business and geographical segments 100 4 Non current assets and goodwill 66 5 Salaries and personnel expenses 101 5 Shares 66 6 Other operating expenses (including fee to 101 6 Long term receivables and other non-current assets auditors) 102 7 Other short term assets 67 7 Impaiment changes and non recurring items 102 8 Equity 67 8 Financial income and Financial expenses 103 9 Deferred tax 68 9 Other income 104 10 Pension expenses and pension liabilites 68 10 Tax 105 11 Debt 71 11 Property, plant & equipment 106 12 Contingencies and legal claims 72 12 Intangible assets 106 13 Guarantee obligations 74 13 Shares and Investment in associated companies 106 14 Financial instruments 76 14 Investment in joint ventures 106 15 Fair value adjustments shares and receivables 76 15 Share investments 107 16 Subordinated loans 76 16 Interest bearing long term receivables 107 17 Cash & cash equivalents 76 17 Other non current assets 107 18 Events after balance sheet date 77 18 Inventories 107 19 Shares owned by Group Leadership and 77 19 Construction contracts Board of Directors 78 20 Trade and other interest receivables 108 20 Remuneration paid to CEO and Group Leadership 78 21 Interest bearing short term receivables 79 22 Cash and cash equivalents 109 Auditors report 79 23 Earning per share and dividends per share 80 24 Paid in capital Aker ASA and holding companies 81 25 Group entities 110 Profit & Loss 82 26 Foreign currency exchange rates 111 Balance sheet 82 27 Interest bearing loans and liabilities 84 28 Operating leases 112 1 Operating income 84 29 Pension expenses and pension liabilites 112 2 Dividend received 85 30 Other long term interest free debt 112 3 Other financial items 85 31 Provisions for loss contracts 112 4 Exceptional financial items 86 32 Other provisions 113 5 Tax 86 33 Guarantee obligations 113 6 Long term equity investment and interest 87 34 Trade and other payables 113 7 Interest free long term receivables and other assets 87 35 Financial instruments 114 8 Interest bearing current assets and long term 91 36 Contingencies and legal claims receivables 92 37 Transactions and agreements with related parties 114 9 Liquid assets 92 38 Remuneration paid to CEO and group management 114 10 Shareholdes equity 94 39 Shares owned by Group Leadership and Board 114 11 Interest free liabilities of Directors 115 12 Interest bearing debt 94 40 Events after balance sheet date 116 Auditors report 94 41 Government grants

Aker ASA annual report 2006 47 Annual accounts Group

Aker ASA Group Profit and Loss Account

Amounts in NOK million Note 2006 2005 2004

Operating revenues 4 79 892 57 927 39 586 Cost of goods and changes in inventory -51 013 -34 903 -22 818 Wages and other personnel expenses 5 -15 892 -13 986 -10 291 Other operating expenses 6 -8 707 -6 045 -4 752 Operating profit before depreciation and amortization 4 280 2 993 1 725 Depreciation and amortization 11,12 -914 -798 -665 Impairment changes and non recurring items 7,11,12 143 -70 680 Operating profit 4 3 509 2 125 1 740 Financial income 8 760 380 184 Financial expenses 8 -1 940 -1 241 -1 050 Share of profit of associated companies 13 2 28 -88 Other items 9 548 1 041 - Profit before tax 4 2 879 2 333 786

Income tax expense 10 -748 64 -342 Profit for the year continued operations 2 131 2 397 444

Discontinued operations: Profit for the period from discontinued operations net of tax 3 1 811 193 104 Profit for the year 3 942 2 590 548

Attributable to: Equity holders of the parent 1 435 1 614 380 Minority interest 25 2 507 976 168

Average number of shares 2) 23 72 367 374 76 588 167 76 971 875

Earnings per share 3) 23 19,82 21,07 4,94 Diluted earnings per share 4) 23 19,82 21,07 4,94

Earnings per share continuing business: Earnings per share 3) 23 12,00 19,81 4,26 Diluted earnings per share 4) 23 12,00 19,81 4,26

1) Profit attributable to the equity holders of the parent / average number of shares 2) There was no potentially dilutive securities outstanding as of 31 December 2005 and 31 December 2006

48 Aker ASA Annual report 2006 Annual accounts Group

Aker ASA Group Balance Sheet of 31 December

Amounts in NOK million Note 2006 2005

ASSETS Property, plant and equipment 11 9 243 6 523 Intangible assets 12 9 985 8 798 Deferred tax assets 10 2 411 2 221 Investments in associated companies 13 1 644 1 191 Other shares 15 263 235 Interest-bearing long-term receivables 16 484 1 020 Pension assets 29 22 17 Other non-current assets 17 240 314 Total non-current assets 24 292 20 319

Inventories 18 1 519 2 256 Projects under construction 19 16 461 11 191 Other trade and other interest-free receivables 20 14 608 10 302 Interest-bearing short-term receivables 21 836 832 Deposit to repay second priority lien notes 27 2 411 Cash and cash equivalents 22 14 987 12 379 Total current assets 50 822 36 960 Total assets 75 114 57 279

EQUITY AND LIABILITIES Paid in capital 24 3 214 3 214 Other capital paid in 5 307 5 307 Translation and other reserve -391 -551 Retained earnings 1 099 135 Total equity attributable to equity holders of the parent 9 229 8 105 Minority interest 25 11 494 6 841 Total equity 20 723 14 946

Interest-bearing loans 27,35 9 786 8 186 Subordinated debt 27 - 3 167 Deferred tax liabilites 10 836 643 Pension liability 29 1 306 1 360 Other interest-free long-term liabilities 30 356 457 Non-current provisions 32 420 305 Total non-current liabilities 12 704 14 118

Interest-bearing short-term debt 27,35 8 809 4 473 Trade and other payables 34 31 290 22 000 Income tax payable 10 287 662 Current provisions 31,32 1 301 1 080 Total current liabilities 41 687 28 215 Total liabilites 54 391 42 333

Total equity and liabilities 75 114 57 279

Oslo, 28 February 2007 Board of Directors Aker ASA

Leif-Arne Langøy (Sign.) Lone Fønss Schrøder (Sign.) Bjørn Flatgård (Sign.) Kjeld Rimberg (Sign.) Kjell A. Storeide (Sign.) (Board Chairman) (Deputy Chairman) ( Director) ( Director) ( Director)

Hanne Harlem (Sign.) Bjarne Kristiansen (Sign.) Harald Magne Bjørnsen (Sign.) Atle Tranøy (Sign.) Bengt A. Rem (Sign.) (Director) (Director) (Director) (Director) (Director)

Aker ASA Annual report 2006 49 Annual accounts Group

Aker ASA Group Consolidated statement of changes in equity

Total Translation Other Hedging Retained Minority Total Amounts in NOK million Note paid in capital reserve reserve reserve earnings Total interest equity

Balance at 31 December 2004 7 807 -505 - - -1 182 6 120 3 123 9 243

Implementing of IAS 39 - 100 100 77 177 Balance at 1 January 2005 24,25 7 807 -505 - - -1 082 6 220 3 200 9 420 Change in fair value of available-for-sale financial assets 23 - - 23 2 25 Currency translation differences - -69 - - - -69 42 -27 Net income recognised directly in equity - -69 23 - - -46 44 -2 Profit for the year 1 614 1 614 976 2 590 Total recognised income and expense - -69 23 - 1 614 1 568 1 020 2 588 Dividend to shareholders - - - - -1 013 -1 013 -53 -1 066 Business combination 714 616 1 330 1 330 New minority ------2 674 2 674 Balance at 31 December 2005 24,25 8 521 -574 23 - 135 8 105 6 841 14 946 Change in fair value of available-for-sale financial assets 12 - - 12 5 17 Change of hedging transactions 102 102 101 203 Currency translation differences - 46 - - - 46 47 93 Net income recognised directly in equity - 46 12 102 - 160 153 313 Profit for the year 1 435 1 435 2 507 3 942 Total recognised income and expense - 46 12 102 1 435 1 595 2 660 4 255 Dividend to shareholders - - - - -470 -470 -376 -846 New minority ------107 107 Sale of shares 39 39 Conversion of convertible debt 221 221 Share issued - - 2 001 2 001 Balance at 31 December 2006 24,25 8 521 -528 35 102 1 099 9 229 11 494 20 723

Translation reserve The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations as well as from translation of liabilities that hedge the Company's net investment in a foreign subsidiary.

Fair value reserve The fair value reserve includes the cumulative net change in fair alue of available-for-sale investments until the investment is derecognised.

Hedging reserve The hedging reserve refers to cash flow hedges entered into to hedge revenues and expenses on ongoing construction contracts against fluctuations in exchange rates. The income statement effect of such instruments are recognised in accordance with progress as part of recognition of revenues and expenses on the construction contracts. The hedging reserve represents the value of such hedging instruments that are not yet recognised in the income statement. Users of the accounts should be aware of the underlying nature of a hedge; e.g that an unrecognised gain on a hedging instrument is there to cover an unrecognised loss on the hedged position.

50 Aker ASA Annual report 2006 Annual accounts Group

Aker ASA Group Cash Flow Statement

Amounts in NOK million Note 2006 2005

Profit before tax 2 879 2 333 Net interest expenses (+) 1 286 626 Interest paid -831 -506 Interest received 305 107 Sales losses/gains (-) and write-downs -93 -1 255 Unrealized foreign exchange gain/loss and other non-cash items -359 -17 Depreciation and amortization 11,12 914 798 Write downs and recognition of negative goodwill 7 -252 Share of earnings in associated companies 13 -2 -28 Dividend received from associated companies 13 17 67 Taxes paid 10 -769 -335 Changes in other net operating assets and liabilites 1 242 1 842 Net cash flow from operating activities 4 337 3 632

Proceeds from sales of property, plant and equipment 11 354 541 Proceeds from sale of shares and other equity investments 13 385 129 Disposals of subsidiary, net of cash disposed 2 142 2 337 Acquisition of subsidiary, net of cash acquired 2 -205 -1 594 Acquisition of property, plant and equipment 12 -3 456 -1 594 Acquisition of shares and equity investments in other companies 13 -479 -474 Effect of combining of businesses/merger - 1 245 Net cash flow from other investments 318 621 Net cash flow from investing activities -941 1 211

Proceeds from issuance of long-term interest-bearing debt 27 4 378 3 786 Proceeds from issuance of short-term interest-bearing debt 27 121 205 Repayment of long-term interest-bearing debt 27 -3 976 -4 122 Deposit to repay second priority lien notes -2 411 Repayment of short-term interest-bearing debt 27 -164 -238 New equity 1 990 853 Dividends paid -846 -1 142 Changes in other financial liabilities 19 64 Net cash flow from financing activities -889 -594

Net change in cash and cash equivalents 2 507 4 249 Effects of changes in exchange rates on cash 101 44 Cash and cash equivalents as of 1 January 12 379 8 086 Cash and cash equivalents as of 31 December 22 14 987 12 379

Aker ASA Annual report 2006 51 Annual accounts Group

Aker ASA Group Notes

Note 1 Accounting principles and estimates

Statement of compliance and basis for such companies. Potential voting rights that expenses, line-by-line, from the time joint con- preparation may be exercised are considered when assess- trol is achieved until joint control ceases. Aker is a Norwegian company, domiciled in ing whether an entity is controlled. Norway. Aker presents its consolidated Group Acquisitions of subsidiaries are accounted Minority interests accounts in accordance with the Norwegian for using the purchase method of accounting. Minority interests have been disclosed separ- accounting act and International Financial The cost of an acquisition is the acquisition- ately from the parent company owners’ equity Reporting Standards (IFRS) as determined by date fair value of the assets acquired, shares and liabilities in the balance sheet, and are the EU. issued or liabilities undertaken, plus costs recorded as a separate item in the consolid- The accounting principles presented below directly attributable to the acquisition. The ated profit and loss account. have been applied consistently for all periods excess of the cost of acquisition over the fair and companies presented in the consolidated value of the net assets of the subsidiary EBITDA financial statements. Consolidated financial acquired, measured at the date of acquisition, Aker defines EBITDA as operating profit before statements are presented in Norwegian kroner is recorded as goodwill. (See “Intangible Ass- depreciation, amortization, and impairment (NOK), which is the functional currency of the ets” for the accounting policy on goodwill.) changes and non recurring items. parent company. Preparation of financial state- Subsidiaries acquired during the year are ments is based on historical cost, except that included in the consolidated financial statements Impairment changes and the following assets and liabilities are stated at from the date on which the Group gains control non recurring items their fair value: derivative financial instruments, over the subsidiary, and subsidiaries sold are Impairment changes and non recurring items financial instruments held for trading, financial included up to the date that control is relinquished. includes write-down of goodwill, significant instruments classified as available for sale, and Where necessary, the accounting policies write-downs and reversals of write-downs on investment property. of subsidiaries have been adjusted to ensure real estate, facilities, and equipment, significant Non-current assets and disposal groups consistency with the policies adopted by the losses and gains on the sale of operating ass- that are classified as held for sale are stated at Group. ets, restructuring costs, and other significant the lower of fair value minus selling costs, or matters that are not deemed to be of a carrying amount. Investments in associates recurring nature. The amount arrived at is Preparation of financial statements in con- The Group’s investment in an associate included in operating profit. formity with IFRS requires management to make (associated company) is accounted for under judgments, estimates, and assumptions that the equity method of accounting. An associate Other items affect the application of guidelines and principles, is defined as a company over which the Group Other items include gains on the sale of sub- as well as the reported amounts of assets and has significant influence but that is not a subsidiaries and significant gains and losses that liabilities, income and expenses. The estimates sidiary or a jointly controlled enterprise. Gener- are not part of the Group’s operational activi- and associated assumptions are based on hist- ally, the Group holds, directly or indirectly, ties. The amount arrived at is included in the orical experience and various other factors between 20% and 50% of the voting rights of profit before tax amount. considered to be reasonable under the associates. Potential voting rights that may be circumstances. Actual results may differ from exercised are considered when assessing Foreign currency translation and amounts arrived at based on these assumptions. whether an entity is under significant influence. transactions Estimates and underlying assumptions are Investments in associates are carried in the Functional currency reviewed on an ongoing basis. Changes to balance sheet at cost plus post-acquisition Initial recording of items included in the finan- accounting estimates are recognized in the changes in the Group’s share of net assets of cial statements of each Group subsidiary is in period in which the estimates are revised if the the associate, less any impairment in value. its functional currency, i.e., the currency that change affects that period, or in the period of The profit and loss account reflects the share best reflects the economic substance of the change and future periods if the change affects of profit/loss from operations of the associate as underlying events and circumstances relevant both current and future reporting periods. financial income/expense. Where there has been to that subsidiary. The consolidated financial The major accounting principles applied in a directly recognized change in the associate’s statements are presented in Norwegian kroner the preparation of the financial statements are equity, the Group recognizes its share of any (NOK), which is the functional currency of the set out below. changes and discloses this, when applicable, in parent company. These consolidated financial statements for the statement of changes in equity. When the the 2006 accounting year were approved for Group’s share of losses exceeds its investment Transactions and balances release by the Board of Directors on 28 Feb- in an associate, the Group’s balance sheet value Foreign currency transactions are translated ruary 2007. is reduced to zero and additional losses are not into NOK using the exchange rates prevailing recognized unless the Group has incurred or at the date of each transaction. Receivables Group accounting guaranteed obligations in respect of the associ- and liabilities in foreign currencies are trans- and consolidation principles ated company. lated into NOK at the exchange rates on the Subsidiaries balance sheet date. Foreign currency The 2006 consolidated financial statements of Jointly controlled entities exchange gains and losses resulting from the Aker include the financial statements of the par- Jointly controlled entities are business entities settlement of such transactions and from the ent company, Aker ASA, and its subsidiaries. that the Group controls jointly with others via a translation of monetary assets and liabilities Subsidiaries are entities of which Aker controls contract-based agreement between the par- denominated in foreign currencies are the company’s operating and financial policies. ties. The consolidated financial statements recognized in the income statement. Foreign Generally, the Group owns, directly or indirectly, include the Group’s proportionate shares of currency exchange differences arising with more than fifty percent of the voting rights of the entity’s assets, liabilities, income, and respect to operating business items are

52 Aker ASA Annual report 2006 Annual accounts Group

included in operating profit in the appropriate at the lower of the carrying amount or the fair these investments are interest-bearing, interest profit and loss account, and those arising with value less selling costs. calculated using the effective interest method is respect to financial assets and liabilities are In component cost accounting, the amount recognized in the profit and loss account. recorded net as a financial item. initially recognized in respect of an item of The fair value of financial instruments property, plant or equipment is allocated among classified as held for trading and available-for- Group companies its significant parts, and each part is depreci- sale is their quoted bid price at the balance Profit and loss accounts and cash flow state- ated separately over its respective useful life. sheet date. Financial instruments classified as ments of subsidiaries whose functional currency held for trading or available-for-sale invest- is not NOK are translated into NOK at average Intangible assets ments are recognized/derecognized by the exchange rates for the period. Balance sheet Goodwill Group on the date it commits to purchase/sell items are translated at the rates on the balance All business combinations are accounted for the investments. Bonds held to maturity are sheet date. Translation differences that arise by applying the purchase method of recognized/derecognized on the day they are from translation of net investments in foreign accounting. Goodwill on acquisitions of sub- transferred to/from the Group. activities and from related hedging objects, are sidiaries, associates, and joint ventures repre- specified as translation differences under sents the difference between the cost of the Impairment shareholders’ equity. When a foreign entity is acquired entity and the fair value of the net The carrying amounts of the Group’s assets, sold, translation differences are recognized in identifiable assets acquired. other than deferred tax assets (see paragraph the profit and loss account as part of the gain Goodwill is stated at cost less any accu- on Income tax), are reviewed on the balance or loss on sale. mulated impairment losses. Goodwill is allo- sheet date to determine whether there is any cated to cash-generating units and is tested indication of impairment. If any such indication Elimination of transactions upon annually for impairment. For associates, the exists, the asset’s recoverable amount is esti- consolidation carrying amount of goodwill is included in the mated. For goodwill, assets that have an inde- Intragroup balances and any unrealized gains carrying amount of the investment in the finite useful life and intangible assets that are and losses or income and expenses arising associate. Negative goodwill arising on an not yet available for use, the recoverable from intragroup transactions, are eliminated in acquisition is recognized directly in the profit amount is estimated at each balance sheet preparing the consolidated financial statements. and loss account. date. Unrealized gains arising from transactions with An impairment loss is recognized associates and jointly controlled entities are Research and development whenever the carrying amount of an asset or a eliminated in proportion to the Group’s interest. Expenditures for research activities that are cash-generating unit exceeds its recoverable Unrealized losses are eliminated in the same undertaken to gain new scientific or technical amount. Impairment losses are recognized in way as unrealized gains, but only to the extent knowledge and understanding, are expensed the profit and loss account. Recognition of that there is no evidence of impairment. in the profit and loss account for the period in impairment losses of cash-generating units is which they are incurred. allocated first to reduce the carrying amount of Property, plant and equipment Development expenditures where research any goodwill and then to reduce the carrying Property, plant and equipment acquired by findings are applied to a plan or design for pro- amount of the other assets in the unit, on a Group companies are stated at historical cost, duction of new or substantially improved pro- pro-rata basis. except that assets of acquired subsidiaries are ducts or processes, are capitalized if the pro- When a decline in the fair value of an stated at acquisition-date fair values. duct or process is technically and commercially available-for-sale financial asset has been Depreciation is calculated on a straight-line feasible and the Group has sufficient resources recognized directly in equity and there is basis over the estimated useful life of the ass- to complete development. The capitalized objective evidence that the asset is impaired, ets and adjusted for impairment losses, if any. amount includes the cost of materials, direct the cumulative loss that had been recognized The carrying value of the property, plant labor expenses, and an appropriate proportion directly in equity is recognized in the profit and and equipment in the balance sheet repre- of overhead expenses. Other development loss account, even though the financial asset sents the cost less accumulated depreciation expenditures are recognized in the profit and has not been disposed of. The cumulative loss and any impairment losses. Interest costs on loss account as an expense for the period in that is recognized in the profit and loss funds borrowed to finance the construction of which they occurred. Capitalized development account is the difference between the acquisi- property, plant and equipment are capitalized expenditures are stated at cost less accu- tion cost and the current fair value, less any during the period required to complete and mulated amortization and impairment losses. impairment loss on the financial asset pre- prepare the asset for its intended use. Other viously recognized in the profit and loss borrowing costs are expensed. Other intangible assets account. Land is not depreciated, but other fixed Other acquired intangible assets (patents, tra- assets in use are depreciated on a straight-line demarks, fishing licenses, and other rights) are Calculation of recoverable amount basis. Expected useful lives of long-lived ass- stated in the balance sheet at cost less any The recoverable amount of the Group’s invest- ets are reviewed annually and, where they dif- accumulated amortization and impairment ment in held-to-maturity bonds and receivables fer significantly from previous estimates, losses. Expenditures on internally generated carried at amortized cost, is calculated as the depreciation periods are changed accordingly. goodwill and brand names are recognized in present value of estimated future cash flows, Ordinary repairs and maintenance costs the profit and loss statement for the period in discounted at the original effective interest rate are charged to the profit and loss account in which they are incurred. (i.e., the effective interest rate computed at initial the financial period when they are incurred. recognition of these financial assets). Receivables The cost of major upgrades and rebuilding Financial investments with a short duration are not discounted. projects is included in the asset’s carrying Financial instruments held for trading are The recoverable amount for other assets is amount when it is probable that the Group will classified as current assets and are stated at the greater of their net selling price or value in derive future economic benefits in excess of fair value. Changes in fair value are recognized use. In assessing value in use, estimated future the originally assessed standard of per- in the profit and loss account. cash flows are discounted to their present formance of the existing asset. Major Where the Group has both the intention and value using a pre-tax discount rate that reflects upgrades and rebuilding projects are depreci- the ability to hold bonds to maturity, they are current market assessments of the time value ated over the useful lives of the related assets. stated at amortized cost less impairment value. of money and risks associated with the specific Gains and losses on the disposal of assets Other financial instruments held by the Group asset. For assets that do not generate largely are determined by comparing the disposal are classified as available-for-sale, and are independent cash flows, the recoverable proceeds with the carrying amount; such gains stated at fair value, with any resultant gain or amount is determined for the cash-generating and losses are recorded under operating profit loss being recognized directly in equity, except unit to which the asset belongs. before depreciation and amortization. If the for impairment losses and items such as foreign amount is material and is not deemed to be of exchange gains or losses. When these invest- Reversal of impairment a recurring nature, the amount is presented ments are derecognized, any cumulative gain or An impairment loss on held-to-maturity bonds under Impairment changes and non recurring loss previously recognized directly in equity, is or on loans and receivables carried at items. Assets to be disposed of are reported recognized in the profit and loss account. Where amortized cost, is reversed if a subsequent

Aker ASA årsrapport 2006 53 Annual accounts Group

increase in the recoverable amount can be estimated reliably, contract revenue is recognized Interest-bearing liabilities objectively connected to an event occurring only to the extent costs incurred are expected All loans and borrowings are initially recognized after the impairment loss was recognized in the to be recovered. Any projected losses on future at cost, which is the fair value of the considera- profit and loss account. work done under existing contracts are tion received net of issue costs associated with An impairment loss on an investment in an expensed and classified as current provisions the borrowing. equity instrument classified as available-for- in the balance sheet under total current After initial recognition, interest-bearing sale is not reversed in the profit and loss liabilites. Losses on contracts are recognized in loans and borrowings are measured at account. If the fair value of a debt instrument full when identified. Recognized contract profit amortized cost using the effective interest met- classified as available-for-sale increases and includes profit derived from change orders and hod; any difference between proceeds (net of the increase can be objectively connected to disputed amounts when, in management’s transaction costs) and the redemption value is an event occurring after the impairment loss assessment, realization is probable and rea- recognized in the profit and loss account over was recognized in the profit and loss account, sonable estimates can be made. the period of the interest-bearing liabilities. the impairment loss will be reversed, with the Project costs include costs directly related Amortized cost is calculated by taking into amount of the reversal recognized in the profit to the specific contract and indirect costs attri- account any issue costs, and any discount or and loss account. butable to the contract. premium on settlement. Goodwill impairment losses are not reversed. Project revenue is classified as operating Gains and losses are recognized in net For assets other than goodwill, an impair- revenue in the profit and loss account. Work in profit or loss when the liabilities are ment loss is reversed if there has been a progress is classified as short-term receivables in derecognized or impaired. change in the estimates used to determine the the balance sheet. Advances from customers are recoverable amount. An impairment loss is deducted from the value of work in progress for Income tax reversed only to the extent that the asset’s the specific contract or, to the extent advances Income tax on the profit and loss statement for carrying amount does not exceed the carrying exceed this value, recorded as customer the year comprises current and deferred tax. amount that would have been determined, net advances. Customer advances that exceed said Current tax is the anticipated tax payable on of depreciation or amortization, if no impair- contract offsets are classified as current liability. the taxable income for the year, using current ment loss had been recognized. tax rates at the balance sheet date, and any Trade receivables and other short-term adjustment to tax payable as to previous years. Leases receivables Deferred income tax is stated, using the Leases of property, plant and equipment in Trade receivables and other short-term liability method, on all temporary differences at which the Group has substantially all the risks receivables are initially recorded at fair value the balance sheet date between the tax bases and rewards of ownership, are classified as and thereafter at amortized cost. Allocations for of assets and liabilities and their carrying finance leases. Finance leases are capitalized at impairment losses on trade receivables are amounts for financial reporting purposes. the inception of the lease at the lower of the fair recognized when there is objective evidence Deferred income tax assets are recognized value of the leased property or the present value that the Group will not be able to collect all for all deductible temporary differences and all of the minimum lease payments. Lease pay- amounts due according to the original terms of carry-forwards of unused tax assets and ments are apportioned between finance charges the receivables. unused tax losses, to the extent it is probable and reduction in the lease liability. Finance that taxable profit will be available against charges are charged directly against income. Cash and cash equivalents which such deductible temporary differences Property, plant and equipment acquired Cash and cash equivalents comprise cash on and carry-forwards can be used. The carrying under finance leases are depreciated over the hand, deposits on call with banks, other short- amount of deferred income tax assets is revi- shorter of the useful life of the asset or the term highly liquid investments with original ewed at each balance sheet date and reduced lease term. maturities of three months or less, and bank to the extent that it is no longer probable that Leases in which a significant portion of the overdrafts. Bank overdrafts are included in sufficient taxable profit will be available to allow risks and rewards of ownership are retained by short-term debt on the balance sheet. all or part of the deferred income tax asset to the lessor are classified as operating leases. be utilized. Deferred tax is measured on an Payments made under operating leases, net of Share capital undiscounted basis. any incentives received from the lessor, are Ordinary shares are classified as equity. Deferred income tax assets and liabilities charged to the profit and loss account on a Incremental costs directly attributable to the are measured at the tax rates that are straight-line basis over the period of the lease. issue of new shares or options are shown in expected to apply in the year when the asset is equity as a deduction, net of tax, from the pro- realized or the liability is settled, based on tax Other long-term receivables ceeds. laws at the balance sheet date. Other long-term receivables are valued at net Where any Group company purchases the Tax consequences relating to items present value if the expected payments are company’s own equity share capital (treasury recognized directly in equity are recognized in long-term and not interest-bearing. shares), the consideration paid, including any equity and not in the profit and loss account. directly attributable incremental costs, is Deferred tax assets and deferred tax liabili- Inventories deducted from equity. ties are offset, if a legally enforceable right exists Inventories are stated at the lower of cost or The translation reserve comprises all to set off current tax assets against current tax net realizable value. Cost is determined by the foreign exchange differences arising from liabilities, and if the deferred tax relates to the first-in, first-out (FIFO) method. The cost of fin- translation of the financial statements of same taxable entity and the same taxing authority. ished goods and work in progress comprises foreign operations, as well as from the trans- raw materials, direct labor and other direct lation of liabilities that hedge Aker’s net invest- Pension obligations costs, and related production overhead (based ments in foreign subsidiaries. The Group has both defined benefit and defined on normal operating capacity), but excludes The hedging reserve refers to cash flow contribution plans. For defined benefit plans, the borrowing costs. Net realizable value is the hedges entered into to hedge revenues and liability recognized is the present value of the estimated selling price in the ordinary course expenses on ongoing construction contracts defined benefit obligation at the balance sheet of business, less the costs of completion and against fluctuations in exchange rates. The date, minus the fair value of plan assets, together selling expenses. income statement effect of such instruments is with adjustments for actuarial gains/losses and recognised in accordance with progress as past service costs. The defined benefit obligation Construction contracts part of recognition of revenues and expenses is calculated by independent actuaries and is The Group’s business activities mainly involve on the construction contracts. The hedging measured as the present value of estimated deliveries of products and services under con- reserve represents the value of such hedging future cash outflows. The cost of providing pens- tracts with customers. Revenues related to instruments that are not yet recognised in the ions is charged to the profit and loss account so construction contracts are recognized using income statement. as to spread the regular cost over the service the percentage of completion method, based The fair value reserve includes the cumula- lives of employees. Actuarial gains and losses primarily on contract costs incurred to date, tive net change in the fair value of available-for- arising from experience adjustments, changes in compared to estimated overall contract costs. sale investments until the investment is actuarial assumptions, and amendments to pens- If the final outcome of a contract cannot be derecognized. ion plans are recognized over the average

54 Aker ASA Annual report 2006 Annual accounts Group

remaining service lives of the employees exchange contracts is their quoted market price Hedging of net investments in foreign concerned. at the balance sheet date, which is the present operations For defined contribution plans, contri- value of the quoted forward price. The proportion of the gain or loss on an instru- butions are paid into pension insurance plans. ment used to hedge a net investment in a Once the contributions have been paid, there Hedging foreign operation that is determined to be an are no further payment obligations. Contri- At the time a contract is entered into, the effective hedge, is recognized directly in butions to defined contribution plans are Group identifies whether it is a hedge of fair equity. The ineffective portion is recognized charged to the profit and loss account in the value of a recognized asset or liability (fair immediately in the profit and loss account. period to which the contributions relate. value hedge) or a hedge of a future transaction (cash flow hedge) or a hedge of a “firm Related party transactions Provisions commitment” (fair value hedge). All transactions, agreements, and business A provision is recognized when the Group has activities with related parties are conducted a present obligation (legal or constructive) as a Cash flow hedge according to ordinary business terms and result of a past event, and it is probable (i.e., Where a derivative financial instrument is conditions. more likely than not) that an outflow of resour- classified as a hedge of the variability in cash ces embodying economic benefits will be flows of a recognized asset or liability, or of a hig- Revenue recognition required to settle the obligation, and a reliable hly probable expected transaction, the effective Revenue is recognized only if it is probable estimate can be made of the amount of the part of any gain or loss on the derivative financial that future economic benefits will flow to Aker, obligation. Provisions are reviewed at each instrument is recognized directly in equity. and that these benefits can be measured balance sheet date and adjusted to reflect the When the forecasted transaction subsequ- reliably. Revenue includes the gross inflows of current best estimate. ently results in the recognition of a non-finan- economic benefits received by Aker on its own The amount of the provision is the present cial asset or non-financial liability, or the foreca- account. In an agency relationship, amounts value of the risk-adjusted expenditures expected sted transaction for a non-financial asset or collected on behalf of the principal are not to be required to settle the obligation, deter- non-financial liability the associated cumulative recognized as revenue by the agent. mined using the estimated risk-free interest rate gain or loss is removed from equity and Revenue from the sale of goods is as a discount rate. Where discounting is used, included in the initial cost or other carrying recognized when Aker has transferred the the carrying amount of a provision increases in amount of the non-financial asset or liability. significant risks and rewards of ownership to each period to reflect the diminishing effect of If a hedge of a forecasted transaction sub- the buyer and it no longer retains control or the discount with the passage of time. This sequently results in the recognition of a finan- managerial involvement in the goods. Revenue increase is recognized as interest expense. cial asset or financial liability, the associated from the rendering of services is recognized in gains or losses that were recognized directly in the profit and loss account in proportion to the Financial risk management equity are stated in the profit and loss account degree of completion of the transaction at the The Group’s activities expose it to a variety of in the same period or periods in which the balance sheet date. The stage of completion is financial risks: market risk (including currency asset or liability affects the profit and loss assessed by reference to reviews of work per- risk, fair value interest risk, and price risk), credit account; for example, the recognition periods formed. risk, liquidity risk, and cash-flow interest-rate for interest income or expense. As soon as the outcome of a construction risk. The Group’s overall risk management pro- For cash flow hedges, other than those cov- contract can be estimated reliably, contract gram focuses on the unpredictability of financial ered under the two preceding paragraphs, the revenues and expenses are recognized in the markets and seeks to minimize potential associated cumulative gain or loss is profit and loss account in proportion to the adverse effects on the Group’s financial per- derecognized in equity and recognized in the degree of completion of the contract. The formance. The Group uses derivative financial profit and loss account in the same period or degree of completion is assessed by refer- instruments to hedge certain risk exposures. periods in which the hedged forecast ence to estimates of work performed. An Risk management is carried out under transaction affects profit or loss. The ineffective expected loss on a contract is recognized policies approved by the Board of Directors. The part of any gain or loss is recognized immedi- directly in the profit and loss account. Board provides guidelines for overall financial ately in the profit and loss account. risk management, as well as policies covering When a hedging instrument expires or is Government grants specific areas such as foreign exchange risk, sold, terminated, or exercised – or the classifi- An unconditional government grant is interest-rate risk, credit risk, use of derivative cation of the hedge (or parts thereof) is recognized in the income statement under financial instruments and non-derivative financial changed – but the hedged forecast transaction Other operating income when the grant is instruments, and investing excess liquidity. is still expected to occur, any cumulative gain received. Any other government grants are or loss recorded at that point in time continues initially recognized in the balance sheet as Accounting for derivative financial to be recorded in equity and is recognized in deferred income when there is reasonable instruments and hedging activities accordance with the above-mentioned prin- assurance that the grant will be received and The Group uses financial derivative instruments ciples when the transaction occurs. If the hed- that the Group will comply with the conditions to hedge its exposure to foreign exchange and ged transaction is no longer expected to take attached to it. Grants that compensate the interest-rate risks arising from operational, place, any cumulative unrealized gains or Group for expenses incurred are recognized financing, and investment activities. losses recognized in equity are immediately as revenue in the profit and loss account on a Financial derivatives are initially recognized recognized in the profit and loss account. systematic basis in the same periods in which at market value. Subsequent to initial recogni- the expenses are incurred. Grants that com- tion, derivative financial instruments are stated Fair value hedging pensate the Group for the cost of an asset, are at fair value. Changes in the fair value of derivatives that recognized in the profit and loss account as Financial derivatives that do not qualify for have been identified and qualify for fair value Other operating income on a systematic basis hedge accounting, are recognized and pre- hedging and that are effective hedges, are over the useful life of the asset. sented as instruments held for trading. Gains or recognized in the profit and loss account, losses on revaluation to fair value are recognized along with any changes in the fair value of the Expenses immediately in the profit and loss account. asset or liability that is being hedged. Operating lease payments Where financial derivatives qualify for Payments made under operating leases are hedge accounting, recognition of any resultant Hedging of monetary assets and recognized in the profit and loss account on a gain or loss depends on the nature of the item liabilities (cash assets) straight-line basis over the term of the lease. being hedged (see Hedging below). Where a derivative financial instrument is used Lease incentives received are recognized in The fair value of interest rate swaps is the as a financial hedge of the foreign exchange the profit and loss account as an integral part estimated amount that the Group would receive exposure of a recognized monetary asset or of total lease expenses. or pay to terminate the swap at the balance liability, no hedge accounting is applied and sheet date, taking into account current interest any gains or losses on the hedging instrument Financial lease payments rates and the current creditworthiness of the are recognized immediately in the profit and Minimum lease payments are apportioned swap counterparties. The fair value of forward loss account. between finance charges and reductions of

Aker ASA Annual report 2006 55 Annual accounts Group

the lease’s outstanding liability. The finance ordinary earnings per share, and gives effect to accounting years beginning on or after 1 Janu- charge is allocated to each period during the all dilutive potential ordinary shares that were out- ary 2008. The standard includes guidance on lease term so as to result in a constant periodic standing during the period, that is: how to account for concession agreements. rate of interest that applies to the remaining • The net profit for the period attributable to The Group plans to implement the standard as balance of the liability. ordinary shares is increased by the after- of the effective date. tax amount of dividends and interest Net financing costs recognized in the period in respect of the Accounting estimates and assumptions Net financing costs comprise interest expenses dilutive potential ordinary shares, and adju- (a) Revenue recognition payable on loans, calculated using the sted for any other changes in income or The Group uses the percentage-of-completion effective interest rate method, interest expense that would result from the convers- method in accounting for its construction con- receivable on funds invested, dividend income, ion of the dilutive potential ordinary shares. tracts. Use of the percentage-of-completion met- foreign exchange gains and losses, and gains • The weighted average number of additional hod requires the Group to estimate the and losses on hedging instruments that are ordinary shares that would have been out- construction performed to date as a proportion of recognized in the profit and loss account. standing, assuming the conversion of all the total construction to be performed. Another Interest income is recognized in the income dilutive potential ordinary shares, increases main uncertainty is the estimated final outcome. statement as it accrues, using the effective the weighted average number of ordinary interest rate method. Dividend income is shares outstanding. (b) Allocations for warranties recognized in the income statement on the date Based on past experience, the Group has pro- the entity’s right to receive payments is establis- Comparative figures vided NOK 583 million in warranty reserves on hed, which in the case of quoted securities is When necessary, comparative figures have completed contracts. The warranty period is usually the ex-dividend date. The interest been adjusted to conform to changes in pre- normally two years. Provisions (see Note 32) expense component of financial lease payments sentation in the current year. are recognized on an individual contract basis, is recognized in the profit and loss account and normally approximate one percent of the using the effective interest rate method. Convertible bonds contract value. Factors that could impact the Convertible bonds that can be converted to estimated claim include the Group’s quality ini- Segment reporting share capital at the option of the holder, and for tiatives and project execution model. Segment reporting is based on the dominant which the number of shares issued does not source and nature of the risks and returns of vary with changes in fair value, are accounted (c) Estimated impairment of goodwill the Group, as well as the Group’s internal for as compound financial instruments. In accordance with its accounting principles, reporting structure. Transaction costs that relate to the issue of a the Group tests annually whether goodwill has The Aker Group has designated business compound financial instrument are allocated to suffered any impairment. The estimated recov- segments as its primary reporting segments, the liability and equity components in pro- erable amounts of cash-generating units have and geographical segments as its secondary portion to the allocation of proceeds. The equity been determined based on value-in-use cal- reporting segments. component of convertible notes is calculated as culations. These calculations require the use of the excess of the issue proceeds over the pre- estimates and are consistent with the market The Group comprises the following business sent value of future interest and principal pay- valuation of the Group. segments: ments, discounted at the market rate of interest – Aker Kværner (Field Development -Maint- applicable to similar liabilities without a convers- (d) Income tax enance, Modifications and Operations – ion option. The interest expense recognized in The Group is subject to income taxes in Subsea, Products & Technologies – Process) the profit and loss account is calculated using numerous jurisdictions. Significant judgment is – Aker Yards (design and construction of vessels) the effective interest rate method. required to determine the worldwide provision – Aker Seafoods (harvesting, processing, and for income taxes. There are many transactions sale of seafood products) Recently issued accounting standards and calculations for which the ultimate tax – Aker American Shipping (design and and pronouncements determination is uncertain during the ordinary construction, chartering of vessels) IFRS and IFRIC Interpretations not yet effective course of business. The Group recognizes allo- – Aker Material Handling (storage and archiv- The Group has not applied the following IFRS cations for liabilities for anticipated tax audit ing systems) and IFRIC interpretations that have been issues, based on estimates of whether – Other businesses (activities that do not qual- issued but are not yet effective: additional taxes will be due following tax audits. ify as separate segments due to the size of IFRS 7 Financial instruments: This standard Where the final tax outcome of these matters is their operations) is effective for annual periods beginning on or different from the amounts that were initially – Aker ASA, including other Holding Companies after 1 January 2007. This standard introduces recorded, such differences will impact the new requirements to improve financial instru- income tax and deferred tax provisions for the The Aker Group has the following geographical ment disclosure. The Group is planning imple- period in which such determination is made. segments: mentation on the effective date. – European Union IFRS 8 Operating Segments: This standard (e) Pension benefits – North America goes into force for accounting years beginning The present value of the pension obligations – Norway on or after 1 January 2009. The standard intro- depends on a number of factors that are deter- – Other areas duces new requirements to improve segment mined on an actuarial basis using a number of – Asia reporting. The Group plans to implement the actuarial assumptions. The assumptions used standard as of the effective date. in determining net pension costs and income Comparative data is generally restated for IFRIC 10 Interim Reporting and Impairment: include an applicable discount rate. Any changes in reportable segments. This standard is effective for annual periods changes in these assumptions will impact the beginning on or after 1 January 2007. This calculated pension obligations. Dividends standard includes restrictions related to The Group determines the appropriate Dividends are recorded in the Group’s financial reversal of impairment losses for certain assets discount rate at the end of each year. This is the statements in the period in which they are in interim periods. The Group is planning interest rate that is to be used to determine the approved by the Group’s shareholders. implementation on the effective date. present value of estimated future cash outflows I FRIC 11 Group and Treasury Share expected to be required to fulfill the pension Earnings per share Transactions: This standard goes into force for obligations. In determining the appropriate The calculation of ordinary earnings per share is accounting years beginning on or after 1 Janu- discount rate, the Group considers the interest based on the profit attributable to ordinary shares ary 2008. The standard includes guidance on rates of high-quality government and/or corporate using the weighted average number of shares how to account for transactions involving share bonds denominated in the currency in which the outstanding during the year, after deduction of payment. The Group plans to implement the benefits are payable and that have terms to the average number of treasury shares held over standard as of the effective date. maturity approximating the terms of the related the period. The calculation of diluted earnings IFRIC 12 Service Concession Arrange- pension liability. Other key assumptions for pens- per share is consistent with the calculation of ments: This standard goes into force for ion obligations include current market conditions.

56 Aker ASA Annual report 2006 Annual accounts Group

NOTE 2: BUSINESS COMBINATION

Acquisition of Aker Yards SA On 31 May 2006, Aker Yards acquired 75 percent of Aker Yards SA from Alstom. Aker Yards SA is a new company established by Alstom; Alstom had transferred employees, assets, and cruise ship contracts at the Chantiers de l’Atlantique yard to Aker Yards SA. Aker Yards SA comprises two shipyards located in Saint-Nazaire and Lorient, and is a part of the Cruise & Ferries business area of Aker Yards. Aker Yards holds an option to acquire, and Alstom has an option to sell, the remaining 25 percent of the shares in Aker Yards SA in 2010 for a price of up to EUR 125 million. The price will depend on future earnings in the newly established unit and the Cruise & Ferries business area in the period 2007-2009. Aker Yards SA is consolidated as if it were 100 percent owned. It is highly probable that the option to acquire the remaining 25 percent of shares will be exercised and that Alstom will no longer be involved in the management of the company. The estimated value of the compensation payable to Alstom for the remaining 25 percent of shares has been discounted and recognized as an interest-bearing liability in the balance sheet.

The preliminary net assets acquired in the transaction, and the goodwill arising, are as follows:

Acquisition costs (in NOK million):

- Cash payments 397 - Expenses directly associated with the acquisitions 62 - Value of compensation based on future earnings 490 Total acquisition costs 949 Fair value of net assets acquired (1 324) Negative goodwill (375)

Assets and liabilities from the acquisition are as follows: Fair value Fair value Book value Amounts in NOK million adjustment of acquired company

Property, plant, and equipment 604 - 604 Other long-term assets 377 374 3 Short-term operating assets 1 529 - 1 529 Cash and cash equivalents 1 116 - 1 116 Total assets 3 626 374 3 252 Interest-bearing loans and credits (12) - (12) Long-term provisions (175) (16) (159) Trade accounts payable and other short-term liabilities (1 188) (70) (1 118) Short-term provisions (927) (920) (7) Net assets 1 324 (632) 1 956 Minority interests - - - Acquired assets, net 1 324 (632) 1 956

Fair value adjustments associated with short-term allocations largely relate to projects under construction, and other long-term fixed assets relate to deferred tax benefits associated with these projects. For the seven-month period until 31 December 2006, Aker Yards France contributed a profit of NOK 523 million to the consolidated 2006 accounts, including negative goodwill recognition of NOK 375 million. It is impossible to provide reliable information on operating revenues and profits for the merged activities as if the acquisition had been completed as of 1 January 2006. Aker Yards SA is a recently established company and may not be compared with Chantiers de l'Atlantique, largely because only certain contracts were transferred from the old to the new company.

Acquisition of Damen Shipyard Okean On 4 August 2006, Aker Yards and Damen Shipyards Group completed the process of establishing joint ownership of the Damen Shipyards Okean yard in Ukraine; the joint ownership was first announced on 2 June 2006. Aker Yards manages the yard, and, in addition to existing projects, will largely focus on production of merchant marine vessels.

Aker Yards has paid EUR 4 million in cash; in addition, Aker Yards has contributed debt repayment amounting to approximately EUR 11 million. Additional payments depend on future yard production output. The estimated value of the remaining compensation payable to Damen has been discounted and recognized as an interest-bearing liability in the balance sheet.

Aker Yards own 50,01% of the shares in Damen Shipyards Okean. According to the agreement with Damen Shipyards Group, Aker Yards has a right and an obligation to acquire the remaining shares over a two-to-three year period.

The purchase price allocation has been determined to be provisional pending the completion of the final valuation of the fair value of assets acquired and liabilities assumed.

Aker ASA Annual report 2006 57 Annual accounts Group

The preliminary net assets acquired in the transaction, and the goodwill arising, are as follows: Acquisition costs (in NOK million):

- Cash payments 117 - Expenses directly associated with the acquisitions 6 - Value of compensation based on future production output 149 Total acquisition costs 272 Fair value of net assets acquired (34) Goodwill 238

Assets and liabilities from the acquisition are as follows: Fair value Fair value Book value Amounts in NOK million adjustment of acquired company

Property, plant, and equipment 161 - 161 Other long-term assets - - - Short-term operating assets 67 - 67 Cash and cash equivalents 3 - 3 Total assets 231 - 231 Interest-bearing loans and credits - - - Long-term provisions (36) - (36) Trade accounts payable and other short-term liabilities (67) - (67) Short-term provisions (94) - (94) Net assets 34 - 34 Minority interests - - - Acquired assets, net 34 - 34

In the five-month period until 31 December 2006, Aker Yards Ulraine contributed a NOK 14 million loss to the consolidated 2006 accounts.

Acquisition of Aker Yards Florø AS and Aker Yards Florø Design AS The agreement entered into with Kleven Maritime on the acquisition of Kleven Florø AS and Kleven Design AS was finalized on 7 August 2006. The acquired companies have changed names to Aker Yards Florø AS and Aker Yards Florø Design AS. The two companies are consolidated into Aker Yards’ accounts as of the agreement date. Aker Yards has paid compensation for the two companies totaling NOK 58 million inclusive related fees. In addition, there are performance-based payments that will depend on profit from the existing order backlog and new orders in the next three years. The purchase price allocation has been determined to be provisional pending the completion of the final valuation of the fair value of assets acquired and liabilities assumed.

The preliminary net assets acquired in the transaction, and the goodwill arising, are as follows: Acquisition costs (in NOK million):

- Cash payments 56 - Expenses directly associated with the acquisitions 2 - Value of compensation based on existing order backlog and future order intake 21 Total acquisition costs 79 Fair value of net assets acquired (51) Goodwill 28

Assets and liabilities from the acquisition are as follows: Fair value Fair value Book value Amounts in NOK million adjustment of acquired company

Property, plant, and equipment 129 - 129 Other long-term assets 82 25 57 Short-term operating assets 386 - 386 Cash and cash equivalents 209 - 209 Total assets 806 25 781 Interest-bearing loans and credits (39) - (39) Long-term provisions (17) (7) (10) Trade accounts payable and other short-term liabilities (87) - (87) Short-term provisions (612) - (612) Net assets 51 18 33 Minority interests - - - Acquired assets, net 51 18 33

Fair value adjustments are related to balance sheet recognition of intangible assets associated with designs at Aker Yards Florø Design. In the five-month period until 31 December 2006, Aker Yards Florø contributed a NOK 2 million loss to the consolidated annual accounts. Further, NOK 28 million in goodwill identified at the acquisition was written down to zero in 2006. Following the August 2006 acquisition of the yard and as part of the introduction of the Group’s standard procedures and systems for project follow-up, it became clear that the productivity of ongoing projects was

58 Aker ASA Annual report 2006 Annual accounts Group

below expectations. Further, errors in project calculations were identified. Thus, goodwill of NOK 28 million was written down. The above-mentioned matters have resulted in financial demands against the previous owner. Business combination, achieved in stages - Aker Floating Production Aker established the company Aker Floating Production in the first quarter of 2006 as a wholly-owned subsidiary. Aker Floating Production plans to build, own and operate a fleet of Smart FPSOs for production and storage of oil and gas. It is the current intention to own four such Aker Smart FPSOs. In April Aker increased the equity in the company through a contribution in kind of USD 125.9 million. The company was at the same time capitalized through a private placement of USD 150 million. It was issued 12 million new shares at a share price of NOK 81.0 per share. Aker’s original shareholding in the company was in the private placement valued to NOK 789 million. Aker invested USD 10 million in the private placement and owned 48.4% of the company following the private placement. The company was listed on Oslo Børs on the 26th of June 2006. On the 11th of August 2006 Aker ASA acquired 383.000 shares in Aker Floating Production ASA at a share price of NOK 76.00 per share. Aker ASA and the wholly-owned subsidiary Aker Capital combined shareholding after this transaction is 11.022.506 shares that constitute 50.01 percent of the total shareholding in Aker Floating Production ASA. During the 6-months period from acquisition to 31. December 2006 the subsidiary contributed a loss of NOK 24 million to the consolidated annual result.

Details of net assets acquired and goodwill are as follows: Acquisition costs (in NOK million): Cash paid and contribution in kind 884 Direct costs relating to the acquisition - Deferred gain in the Aker Group (371) Total purchase consideration less deferred gain 513 Fair value of net assets acquired 884 Deferred gain in the Aker Group (371) Total fair value of net assets acquired less deferred gain 513 Goodwill (0)

The assets and liabilities arising from the acquisition are as follows: Fair value Fair value Book value Amounts in NOK million adjustment of acquired company

Intangible assets 786 - 786 Property, plant and equipment 158 - 158 Other non-current assets 12 - 12 Inventory and interest free current assets 41 - 41 Cash and cash equivalents 713 - 713 Total Assets 1 709 - 1 709 Interest bearing liabilities - - - Non-current provisions - - - Accounts payable and other short term liabilities (6) - (6) Current provisions - - - Net assets 1 703 - 1 703 Minority interests (819) (819) - Net assets acquired 884 (819) 1 703

Acquisition of Natural ASA Aker announced the 1st of September that a volunteer offer to buy all the shares in Natural ASA was prepared. At the 5th of October Aker owned and had received acceptance of totally 4 250 281 shares, 41.9% of the shares. The 16th of November Aker entered into an agreement with Life Capitols to purchase their remaining shareholding of 1 951 440 shares in Natural ASA. In addition Aker purchased 2 840 000 shares in the market. After these transactions Aker controls 89.14% of the shares in Natural ASA.

Details of net assets acquired and goodwill are as follows: Acquisition costs (in NOK million): - Cash paid 498 - Direct costs relating to the acquisition - - Value of compensation based on future profit - Total acquisition costs 498 Fair value of net assets acquired (341) Goodwill 157

Aker ASA Annual report 2006 59 Annual accounts Group

The assets and liabilities arising from the acquisition are as follows: Fair value Fair value Book value of Amounts in NOK million adjustment acquired company Intangible assets 486 473 13 Property, plant and equipment 16 - 16 Inventory and interest free current assets 5 - 5 Cash and cash equivalents 13 - 13 Total Assets 520 473 47 Interest bearing liabilities (5) - (5) Deferred tax liabilities (128) (128) Non-current provisions (1) - (1) Accounts payable and other short term liabilities (3) - (3) Current provisions - - - Net assets 382 344 38 Minority interests (42) (38) (4) Net assets acquired 341 307 34

The fair value adjustment is allocated to license agreements that have duration of 10 to 12 year. Goodwill is allocated to the company's competence related to Omega-3 phospholipids and was valued at the 5th of October at shareholding of 41.9% and at the 16th of November when Aker had 89.14% of the shares. In addition Aker BioMarine has purchased 100% of the Danish company Krill AS for NOK 11 million. The fair value of intangible assets in this purchase was NOK 5 million. This intangible value is allocated to the company's development of blood clot medicine. During the 1-months period from acquisition to December 2006 the subsidiaries contributed a profit of NOK 1 million to the consolidated annual result.

Minor acquisitions in Aker Acquisition of TH Resource Aker Kvaerner acquired in October TH Resources with a total of 1 300 specialists who were working for Aker Kvaerner in UK on contract basis. These specialists are key to Aker Kvaerner's excecution of its record-high order backlog, and they will play an important roles in pursuing excisting and future business opportunities.

Noviter OY Aker Kvaerner acquired in February 60 percent of the shares in the company. The Noviter headquarters are in Finland with business primarily in Finland, Russia and the Baltic region. The company is a supplier of power generattion plants based on natural gas, oil or biomass

Aker Kvaerner Powergas India Akker Kvaerner entered into an agreement in 2005 to increase the ownership from 49 to 64 percent. The increase is effected in 2006 and Aker Kvaerner considers the company a strategic resourse for the group's units and projects in many parts of the world The engineering office in Mumbai gives access to approximately 1 000 highly qualified engineers and strengthen the group's competitiveness

Mc Cartin McAuliffe Mechanical Contractor, Inc The purchase in March was primarily ownerships in projects (joint ventures)

Hanøytangen Finance Aker Maritime Finance AS, a 100% owned subsidiary of Aker ASA, purchased 100 % of the company Hanøytangen Invest in October. The assets in the company consist mainly of shares in Rosenberg Verft (18%) and land.

The assets and liabilities arising from minor acquisitions in Aker are as follows: Fair value Fair value Book value Amounts in NOK million adjustment of acquired company

Plant and equipment 112 112 Interest-bearing current receivables 95 95 Non-current investments 106 106 Current operating assets 363 363 Cash and cash equivalents - 56 - 56 Minority interests - 67 - 67 Deferred tax liabiliites Other non-current liabilities - 40 - 2 Current operating liabilities - 398 - 398 Net assets and liabilities 115 153 Goodwill 726 Deferred payment - 514 Total 327

Cash paid - 214 Cash acquired - 56 Net cash outflow - 383

60 Aker ASA Annual report 2006 Annual accounts Group

Cash flow effects on aquisitions in Aker

Fair value of net assets and liabilities are as follows: Amounts in NOK million

Plant and equipments 1 180 Interest-bearing current receivables 95 Other non-current asset 577 Current operating assets 2 391 Cash and cash equivalents 1 997 Minority interest - 928 Deferred tax liabilities - 128 Trade and other payables -1 751 Current provisions -1 635 Interest-bearing debt - 94 Other non-current liabilities - 231 Net assets and liabilities 1 473 Intangible assets 2 046 Deferred payments -1 317 Total 2 202

Cash paid -2 202 Cash aquired 1 997 Net cash outflow - 205

NOTE 3: DISCONTINUED OPERATIONS

Sale of Pulping and Power business A letter of intent for sale of Aker Kvaerner's Pulping and Power businesses was signed with Metso on 8 February 2006. The final agreement was signed on 28 April, and on 12 December 2006 the sale was approved by the European Commission. The transaction was closed on 29 December 2006 and the final transaction is based on the balance sheet as of the end of 2006. The table below shows the financial data for Pulping and Power including the sales gain. As a result of the sale, Metso will be a provider of complete solutions. Aker Kvaerner’s Pulping business has 630 employees in 12 countries, with its main office in Karlstad, Sweden, and regional offices in Curitiba, Brazil, Tokyo, Japan and Montreal, Canada. The company delivers complete fiberlines, machinery, process systems and improvement services to the chemical pulp industry worldwide. The products are used for continuous cooking, washing, oxygen delignification, bleaching and recausticizing plants. The company delivers complete pulping systems to pulping mills worldwide. Aker Kvaerner’s Power business has 1400 employees, with main offices in Tampere, Finland and Gothenburg, Sweden, Charlotte, USA and Curitiba, Brazil. In addition, manufacturing facilities are located in Finland, Sweden and the USA. The company delivers complete systems for chemical recovery in the pulping industry as well as power generation generation solutions for both the pulp & paper industry and the power generation industry.

Aker ASA Annual report 2006 61 Annual accounts Group

Financial data Pulping and Power: 1.4 - 31.12 Amounts in NOK million 2006 2005 2004

Operating revenues 5 520 4 523 3 667 Operating expenses -5 223 -4 194 -3 407 EBITDA 297 329 170 Depreciation - 54 - 50 - 35 Operating profit 243 279 135 Financial items - 10 - 1 30 Profit/loss before tax 233 278 165 Taxation - 65 - 85 - 61 Net profit/loss 168 193 104 Sales gain 1) 1 643 - - Tax - - - Profit for the period from discontinued operations 1 811 193 104

Amounts in NOK million 2006 2005

Plant and equipments 251 238 Intangible assets 325 265 Other non-current asset 74 18 Current operating assets 2 158 1 327 Other non-current liabilities - 134 - 120 Current operating liabilities -3 019 -1 832 Net assets and liabilities - 345 - 104

Amounts in NOK million 2006 2005

Net cashflow from operating activities 549 158 Net cashflow from investing activities - 100 - 104 Net cashflow from financing activities 159 67 Cash proceeds and dividend re disposal of Pulping and Power businesses 1 996 Cash flow from Pulping and Power 2 604 121

1) Cash proceeds of NOK 1 996 million are calculated as follows: Cash Amounts in NOK million proceeds Received cash 2 569 Cash in operations sold -436 Cash procees before transaction costs 2 133 Transaction costs -137 Total 1 996

NOTE 4: BUSINESS AND GEOGRAPHICAL SEGMENTS

Segment information is presented in respect of the Group's business and geographical segments.The primary format, business segments, is based on the Group's management and internal reporting structure. The operating companies in the Group which represent the different business segments provide different products and services and they are subject to different risk and returns. See the Board of directors' report for a description of the operating companies.

Operating revenue in geographical segments are based on the geographical location of customers whereas Segment assets and Capital expenditure are based on geographical location of the companies.

Inter-segment pricing are set on an arm's length basis in a manner similar to transactions with third parties.

62 Aker ASA Annual report 2006 Annual accounts Group

Aker Other investments 2006 - Business segments Aker Aker American Aker Aker Material Holding companies Amounts in NOK million Kværner Yards Shipping Seafoods Handling and eliminations Consolidated

External operating revenues 50 592 25 613 236 2 120 1 601 -270 79 892 Inter-segment revenues 0 248 0 0 0 -248 0 Operating revenues 50 592 25 861 236 2 120 1 601 -518 79 892 EBITDA 2 872 1 443 33 195 75 -338 4 280 Depreciation and amortization -339 -381 -5 -83 -29 -77 -914 Impairment changes and non recurring items 0 183 0 40 0 -80 143 Operating profit 2 533 1 245 28 152 46 -495 3 509 Share of earnings in associated companies -18 54 0 1 0 -35 2 Net financial itmes -646 -72 48 -49 -22 109 -632 Profit before tax 1 869 1 227 76 104 24 -421 2 879 Tax expense -575 -190 0 18 21 -22 -748 Profit from continued business 1 294 1 037 76 122 45 -443 2 131

Order intake 6) 62 271 47 892 0 0 1 670 0 111 833 Order backlog 6) 59 695 79 420 4 089 0 386 0 143 590

Property, plant and equipment 1 761 3 469 1 956 761 196 1 100 9 243 Intangible assets 5 054 1 645 72 911 225 2 078 9 985 Investment in associated companies 122 204 0 6 0 1 312 1 644 Inventories, projects under constr. and interest-free receivables 15 118 15 882 140 490 573 385 32 588 Other assets 1) 9 341 7 320 191 538 113 4 151 21 654 Total assets 31 396 28 520 2 359 2 706 1 107 9 026 75 114

Trade and other payables 16 217 13 198 198 279 453 945 31 290 Current Provisions 602 659 13 0 5 22 1 301 Other liabilities 2) 6 463 8 517 948 1 447 484 3 941 21 800 Total liabilities 23 282 22 374 1 159 1 726 942 4 908 54 391

Capital expenditure 3) 1 603 526 1 251 81 41 1 022 4 524

Aker Other investments 2005 - Business segments Aker Aker American Aker Aker Material Holding companies Amounts in NOK million Kværner 7) Yards Shipping 4) Seafoods Handling and eliminations Consolidated

External operating revenues 36 940 16 560 345 2 339 1 347 396 57 927 Inter-segment revenues 0 47 0 0 0 -47 0 Operating revenues 36 940 16 607 345 2 339 1 347 349 57 927 EBITDA 1 816 1 029 35 181 35 -103 2 993 Depreciation and amortization -306 -284 -22 -83 -26 -77 -798 Impairment changes and non recurring items 0 -65 0 0 -2 -3 -70 Operating profit 1 510 680 13 98 7 -183 2 125 Share of earnings in associated companies 25 25 0 -5 0 -17 28 Net financial itmes -795 -1 52 -52 -20 996 180 Profit before tax 740 704 65 41 -13 796 2 333 Tax expense 312 73 -21 -4 0 -296 64 Profit for the year 1 052 777 44 37 -13 500 2 397

Order intake 5) 51 937 32 084 0 0 1 391 0 85 412 Order backlog 5) 48 522 38 897 5 830 0 303 0 93 552

Property, plant and equipment 1 549 2 352 798 803 182 839 6 523 Intangible assets 4 581 1 402 118 877 214 1 606 8 798 Investment in associated companies 113 132 0 7 0 939 1 191 Inventories, projects under constr. and interest-free receivables 11 897 9 668 839 503 392 450 23 749 Other assets 1) 8 155 4 770 337 560 99 3 097 17 018 Total assets 26 295 18 324 2 092 2 750 887 6 931 57 279

Trade and other payables 14 421 6 556 165 189 307 362 22 000 Current Provisions 769 280 13 86 9 -77 1 080 Other liabilities 2) 6 778 6 402 691 1 569 463 3 350 19 253 Total liabilities 21 968 13 238 869 1 844 779 3 635 42 333

Capital expenditure 3) 481 408 339 73 35 258 1 594

Aker ASA Annual report 2006 63 Annual accounts Group

Aker Other investments 2004 - Business segments Aker Aker American Aker Aker Material Holding companies Amounts in NOK million Kværner 7) Yards Shipping 4) Seafoods Handling and eliminations Consolidated

External operating revenues 24 171 11 816 0 971 1 231 1 397 39 586 Inter-segment revenues 0 1 0 0 0 -1 0 Operating revenues 24 171 11 817 0 971 1 231 1 396 39 586 EBITDA 880 727 0 54 11 29 1 725 Depreciation and amortization -190 -260 0 -55 -26 -134 -665 Impairment changes and non recurring items -11 -149 0 18 -8 854 680 Operating profit 679 318 0 17 -23 749 1 740 Share of earnings in associated companies -14 0 0 0 0 -74 -88 Net financial itmes -342 -34 0 -20 -17 -453 -866 Profit before tax 323 284 0 -3 -40 222 786 Tax expense -45 -75 6 4 -232 -342 Profit for the year 278 209 0 3 -36 -10 444

Operating revenues Total assets Capital expenditure Geographical segments by customer location by company location by company location 3) Amounts in NOK million 2006 2005 2004 2006 2005 2006 2005 Norway 28 199 19 443 13 940 25 048 22 346 1 551 547 EU 17 561 15 233 11 254 32 617 20 597 1 107 443 America/Canada 15 024 12 016 6 185 10 402 10 873 1 439 410 Asia 6 122 3 161 3 024 1 583 661 221 7 Other areas 12 986 8 074 5 183 5 464 2 802 206 187 Total 79 892 57 927 39 586 75 114 57 279 4 524 1 594

1) Other assets include deferred tax assets, interest-bearing receivables, cash and cash equivalentes and other financial assets. 2) Other liabilites include Non-current liabilities, Interest-bearing short-term debt, Income tax payable and Dividend payable. 3) Capital expenditure comprises additions to property, plant and equipment and Intangible assets. 4) The Profit and loss for Aker American Shipping in this note includes the Profit and loss from the time of Aker's aquisition 30 june 2005. 5) Unaudited 6) Aker Yards Profit & Loss in the period 1. januar - 31. March 2004 ownership of Aker RGI Holding AS and the Aker Yards ASA Group from April 2004. 7) The Pulping and Power entities in Aker Kværner are in the accounts shown as discontinuing operations, but as the Balance sheet is not revised the figures are included in the segment figures for assets and capital expenditure by location.

Analysis of operating revenues by category Amounts in NOK million 2006 2005 2004 Construction contract revenue 57 737 38 802 24 770 Sales of goods 9 184 7 487 6 956 Revenue from services 12 453 11 146 7 115 Other 518 492 745 Total 79 892 57 927 39 586

2006 - Aker Yards business segments Offshore- Crusiseship Merchant and specialized Amount in NOK million and ferries vessels vessels Other Total

Operating income 11 178 6 460 7 749 474 25 861 EBITDA 895 140 583 -175 1 443 Depreciation and amortization -159 -91 -86 -50 -386 Segment result 736 49 497 -225 1 057 Property, plant & equipment 1 624 831 1 009 5 3 469 Intangible assets 15 29 129 1 472 1 645 Shares in associated companies 3 - - 201 204 Inventories, projects in process and short-term interest free receivables 7 963 3 420 4 516 -16 15 882 Other assets 4 074 1 785 1 049 411 7 319 Total assets 13 679 6 064 6 703 2 074 28 520 Trade payables and other liabilites 5 917 4 752 2 441 88 13 198 Short-term provisions 609 37 12 1 659 Other obligations 3 702 428 3 295 1 092 8 517 Total liabilities 10 227 5 217 5 748 1 181 22 374 Capital expenditure 248 70 208 - 526

64 Aker ASA Annual report 2006 Annual accounts Group

Information regarding Aker Kværner business segments:

Maintenance, Subsea 2006 - Aker Kværner business segments Field, Modifications, Products & Pulping & Development and Operations Technologies Process Power Other Total Beløp i mill kroner (FD) (MMO) (SPT) (PRO) (P&P)

Total revenue from external customers 16 340 9 367 13 032 11 191 0 662 50 592 Inter-segment revenue 619 415 1 230 142 0 -2 406 0 Operating revenue 16 959 9 782 14 262 11 333 0 -1 744 50 592 EBITDA 1 044 468 972 401 0 -13 2 872 Depreciation and amortization -61 -7 -162 -15 0 -94 -339 Operating profit (+) / loss (-) 983 461 810 386 0 -107 2 533 Share of earnings in associated companies 2 0 -1 1 0 -20 -18 Capital expenditures 93 16 487 19 0 211 826 Net short-term operating assets excl. tax and dividend -1 968 125 387 -607 0 -109 -2 172 Net long-term operating assets excl. tax and dividend 1 341 1 154 2 205 1 019 0 -141 5 578 Net operating assets excl. tax and dividend -627 1 279 2 592 412 0 -250 3 406 Tax 348 Net operating assets incl. tax -627 1 279 2 592 412 0 -250 3 754 Investment in associated companies 53 0 18 20 31 122 Investments excl associated companies 16 Net borrowings 4 222 Total equity inc. minority interests 8 114

Order intake 17 833 10 032 24 490 11 136 0 -1 220 62 271 Order backlog 20 813 12 272 21 392 7 658 0 -2 440 59 695 Employees 5 200 5 238 4 958 6 223 0 1 103 22 722 Goodwill 1 099 1 478 1 419 1 015 0 43 5 054 Total operating assets excl. tax and dividend 5 161 3 767 8 786 3 780 0 449 21 943 Total operating liabilities excl. tax and dividend -5 788 -2 488 -6 195 -3 368 0 -698 -18 537

Maintenance, Subsea 2005 - Aker Kværner business segments Field, Modifications, Products & Pulping & Development and Operations Technologies Process Power Other Total Amounts in NOK million (FD) (MMO) (SPT) (PRO) (P&P) 7)

Total revenue from external customers 10 443 7 061 9 322 9 594 520 36 940 Inter-segment revenue 177 391 532 31 -1 131 0 Operating revenue 10 620 7 452 9 854 9 625 -611 36 940 EBITDA 632 290 654 224 16 1 816 Depreciation and amortization -57 -13 -151 -20 -65 -306 Operating profit (+) / loss (-) 575 277 503 204 -49 1 510 Share of earnings in associated companies 18 12 -5 0 0 25 Capital expenditures 46 13 213 12 92 105 481 Net short-term operating assets excl. tax and dividend -3 911 7 1 454 -38 -477 -362 -3 327 Net long-term operating assets excl. tax and dividend 1 207 1 096 1 185 891 392 -35 4 736 Net operating assets excl. tax and dividend -2 704 1 103 2 639 853 -85 -397 1 409 Tax 787 Net operating assets incl. tax 2 196 Investment in associates 113 Investments excl associates 22 Subordinated loan -3 167 Net borrowings 5 163 Total equity inc. minority interests 4 327

Order intake (unaudited) 19 060 9 875 15 445 10 453 -2 896 51 937 Order backlog (unaudited) 20 265 12 061 11 269 8 174 -3 247 48 522 Employees (unaudited) 4 039 4 705 3 586 4 965 1 029 18 324 Goodwill 1 099 1 469 722 875 264 152 4 581 Total operating assets excl. tax and dividend 4 300 2 969 5 732 3 031 1 829 139 18 000 Total operating liabilities excl. tax and dividend -7 023 -1 866 -3 093 -2 159 -1 914 -536 -16 591

Aker ASA Annual report 2006 65 Annual accounts Group

Maintenance, Subsea 2004 - Aker Kværner business segments Field, Modifications, Products & Pulping & Development and Operations Technologies Process Power Other Total Amounts in NOK million (FD) (MMO) (SPT) (PRO) (P&P)

External operating revenue:

Total revenue from external customers 7 392 4 497 5 766 6 497 19 24 171 Inter-segment revenue 221 305 251 19 -796 0 Operating revenue 7 613 4 802 6 017 6 516 -777 24 171 EBITDA 319 180 398 84 -101 880 Depreciation and amortization -48 -5 -81 -20 -47 -201 Operating profit (+) / loss (-) 271 175 317 64 -148 679 Share of earnings in associated companies 12 -3 -19 0 -4 -14

NOTE 5: WAGES AND OTHER PERSONNEL EXPENSES

Wages and other personnel expenses consist of: Amounts in NOK million 2006 2005 2004

Wages 12 589 11 963 8 861 Social security contributions 2 070 1 658 1 370 Pension costs 603 658 438 Other expenses 630 511 407 Discontinuing business 0 -804 -785 Total 15 892 13 986 10 291 Average number of employees 41 428 36 377 35 599 Number of employees at year end 46 255 36 937 35 816

Geographically split of number of employees per region Norway 13 837 12 453 12 176 EU 12 630 11 214 11 978 North America 7 246 5 514 4 185 Asia 2 387 701 620 Other regions 10 155 7 055 6 857 Sum 46 255 36 937 35 816

NOTE 6: OTHER OPERATING EXPENSES Other operating expenses consist of: Amounts in NOK million 2006 2005 2004

Research and development 119 197 103 Rent and leasing expenses 636 611 635 Impairment loss on trade receivables 1 3 - Other operating expenses 7 951 5 936 4 251 Discontinuing business -702 -237 Total other operating expenses 8 707 6 045 4 752

Most of the research and development work in Aker is related to ongoing projects and the costs are expensed as contract costs. As it is not possible to identify and quantify the future revenues that are directly linked to these costs NOK 119 mill have been expensed as research and development costs during the year (2005: NOK 197 mill).

Cost related to hire of work force is included in Other Operating expense, total amount in 2006 is NOK 2 539 mill. The amount consists of cost related to personnel without fixed contract but who are not a subcontractor and external administrative consulting services.

Payments/fees to auditors for the Aker ASA Group have the following split per category:

Ordinary Consulting Amounts in NOK million auditing services 2006 2005 2004 Aker ASA 2 1 3 35 Subsidiaries 43 21 64 50 48 Total 45 22 67 53 53

Consulting services of NOK 22 mill consists of NOK 6 million in other assurance services, NOK 8 mill in tax advisory services and NOK 8 mill in non-audit services.

66 Aker ASA Annual report 2006 Annual accounts Group

NOTE 7: IMPAIRMENT CHANGES AND NON RECURRING ITEMS

Negative goodwill of NOK 379 million was identified during the acquisition of Aker Yards France and recognized in the 2006 Profit & Loss. See note 2 for a more detailed description of the acquisition.

Impairment changes and non recurring items include impairment losses on goodwill, impairment loss and impairment reversal on property, plant and equipment, major losses on the sale of operating assets, restructuring costs and other material matters not expected to be of a recurring nature.

The items are as follows: Amounts in NOK million 2006 2005 2004

Non-recurring cost in connection with the combining of shipbuilding activites in Aker Yards - - -30 Impairment loss on intangible assets (note 12) -82 -70 -91 Recognition of badwill 379 - 840 Impariment loss property, plant and equipment (note 11) -45 -11 -17 Reversal of impairment loss property, plant and equipment (note 11) - 1 - Other sales loss and gains - 10 -12 Other restructuring costs -109 - -10 Total 143 -70 680

2006 The 2006 accounts are charged with a total of NOK 109 million in non-recurring expenses. Of this amount, NOK 91 million is associated with early retirements at Aker Yards Germany. In November 2006, the pension plan in Germany was modified so that the existing program for early retirement would become relatively unattractive after 31 December 2006. All employees who will reach the age of 57 before year-end 2009 were able to take advantage of the existing plan if they did so before year-end 2006. As part of the strategy of securing more young workers for the company, early retirement agreements were signed with about 200 individuals and NOK 91 million was allocated to cover liabilities associated with these agreements. Parts of the liabilities will be offset by government authorities upon employment of new staff to replace those who retire early. The allocation will have a cash effect over the next 3-8 years.

In February 2007, a share acquisition agreement was signed with Aker Yards’ former partners in Brazil, in order to increase Aker Yards’ ownership stake in Aker Yards Promar shipyard from 51 percent to 100 percent. As part of the share acquisition, write-downs of balance sheet items totaling NOK 18 million were made, mainly associated with lawsuits dating back 3-4 years.

2006 and 2005 During the acqusition analysis of the business combination then Aker Yards group was established in 2004 the deferred tax assets related to accumulated loss carried forward in Aker Ostsee at the date of business combination were not fully accounted for due to uncertainties about future utilization. Due to the good order backlog situation in Aker Yards Germany a future utilization of loss carried forward is now more probable and a deferred tax asset of NOK 54 mill related to this was recognized in 2006. ( 2005: NOK 68 mill). The book value of goodwill related to Aker Yards Germ- any is adjusted accordingly in line with IFRS 3 (65). The reduction in goodwill is expensed as impairment of goodwill.

2004 Material items regarding impairment loss on intangible assets is goodwill related to Aker Material Handling NOK 54 million and NOK 11 million in Aker Kværner (Subsea og Products & Technologies). Impariment loss property, plant and equipment include write-down of buildings in Laubach Germany of NOK 15 million. NOK 840 million in badwill is recognized in the 2004 accounts. This relates to the combining of the shipbuilding activites in Aker RGI and Aker Kværner.

NOTE 8: FINANCIAL INCOME AND FINANCIAL EXPENSES

Amounts in NOK million 2006 2005 2004 Interest income 330 168 110 Dividend income 51 6 8 Other financial income 1) 379 218 103 Discontinuing operation -12 -37 Financial income 760 380 184 Interest expense -749 -567 -756 Non payable interest expense Subordinated loan 2) -207 -227 -63 Net foreign exchange loss 43 20 -18 Foreign exchange on disqualified hedge instruments 3) 241 -396 - Refinancing expenses -652 - - Other financial expenses 4) -616 -84 -220 Discontinuing operation 13 7 Financial expenses -1 940 -1 241 -1 050 NET FINANCIAL ITEMS -1 180 -861 -866

1) Hereof gain from sale of NorSea, NOK 220 million. 2) Subordinated loan in Aker Kværner. The figures in 2006 relates to the period 1.January to 1.December. 3) Since the hedging instruments in Aker Kværner do not qualify for hedge accounting under IAS39, the fair value changes on foreign exchange forward contracts have been recorded in the income statement as a financial item. This relates to 2005, January 2006 and for the smaller contracts the remaining of 2006. Hedging is explained in more detail in note 36. 4) Hereof write down of receivables on TH Global NOK 260 million and Sea Launch NOK 183 million.

Aker ASA Annual report 2006 67 Annual accounts Group

NOTE 9: Other

Amounts in NOK million 2006 2005 2004

Gain by establishing and downward sale of Aker Floating Production 396 - - Gain by establishing and downward sale of Aker Exploration 152 Gain by establishing and downward sale of Aker Drilling 641 Sale of Aker Hus 400 Other items 548 1 041 -

Aker Floating Production in 2006 Aker Floating Production raised USD 15O million in equity in a private placement from international and Norwegian investors. Prior to the private placement of shares, Aker Floating was valued at NOK 800 million. Aker’s ownership interest in Aker Floating was reduced from 100 percent to 49,4 %, following the share issue. The gain after deduction of brokerage of NOK 767 mill is reduced by NOK 371 mill to NOK 396 mill in the Aker Group. The reduction represents 48,4 % of the total gain.

Aker Exploration in 2006 Aker Exploration raised NOK 915 million in equity from international and Norwegian investors. Of this amount, Aker contributed NOK 304 million. Prior to the private placement of shares, Aker Exploration was valued at NOK 305 million. Aker’s ownership interest in Aker Exploration was reduced, from 100 percent to 49,9 %, following the share issue. Aker Exploration also raised NOK 458 million from international investors via a convertible bond issue; the bonds can be converted into Aker Exploration shares. The gain of NOK 304 mill is reduced by NOK 152 mill to NOK 152 mill in the Aker Group. The reduction represents 49,9 % of the total gain.

Aker Drilling in 2005 Aker Drillling, a subsidiary of Aker Capital, placed on 3.October 2005 a fixed price order for two semi-submersible drilling rigs. The two identical rigs will be designed and built by Aker Kværner. Aker Drilling decided on 13.October to issue 67,8 million new shares at a price of 36,85 per share. The indicative price interval was set from NOK 32,00 to NOK 36,85. Aker Drilling has 93 million shares after the stock issue. The implied market value is NOK 3,4 billon. The value of Aker Capital's 25,3 million shares amount to NOK 926 millon. In addition Aker Capital subscribed for 3,4 millon share in the stock issue, in total the booked value of Aker Capitals 30,8% share in Aker Drilling at year end is NOK 1 056 millon. The gain of NOK 926 millon in Aker Capital is in the Aker Group reduced by NOK 285 millon to NOK 641 millon. The reduction represent 30,8 % of the total gain.

Aker House in 2005 On 3.November 2005 Aker signed an agreement to sell all shares in the Real estate company, who owns the land and building project for the Groups new head office at Fornebu outside Oslo, to Næringsbygg Holding 2 AS. The real estate transaction contributed a profit to Aker of NOK 400 millon.

NOTE 10: TAX

INCOME TAX EXPENSE Recognised in the income statement

Amounts in NOK million 2006 2005 2004

Current tax expense: Current year -482 -599 -213 Adjustments for prior years -9 -31 -27 Total current tax expense -491 -630 -240

Deferred tax expense: Origination and reversal of temporary differences -453 -229 89 Reduction in tax rate - - - Benefit of tax losses recognised 196 838 227 Effect of changes in tax rules in Norway - - -479 Total deferred tax expense -257 609 -163 Discontinuing operations 85 61 Total income tax expense in income statement -748 64 -342

68 Aker ASA Annual report 2006 Annual accounts Group

Reconciliation of effective tax rate Accounts Amounts in NOK million 2006 2005 2004

Profit before tax 2 879 2 333 786

Nominal tax rate Norway 28% -806 -653 -220 Effect of changes in tax rules in Norway - - -479 Tax differential in Norway and abroad -170 -91 -120 Income not subject to tax 367 311 276 Expenses not deductible for tax purposes -5 - - Utilisation of previously unrecognised tax losses 137 838 227 Tax losses for which no deferred income tax asset was recognised -220 - - Tax expense related to not approved tax statment in USA - -312 Other differences -51 -29 -26 Total income tax expense in income statement -748 64 -342

DEFERRED TAX ASSETS AND LIABILITIES The gross movement on the deferred income tax account (assets and liabilities) is as follows: Amounts in NOK million 2006 2005

Beginning of the year 1 578 1 173 Exchange differences 94 116 Acquisition and sale of subsidiaries 228 -262 Income statement charge -257 609 Tax charged to equity -68 -58 End of the year 1 575 1 546 Deferred tax assets 2 411 2 221 Deferred tax liabilities (-) -836 -643 End of the year 1 575 1 578

The movement in deferred tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same tax jurisdiction, is as follows:

Deferred tax assets: Fair value Provisions Pension Tax losses Other Total Amounts in NOK million adjustment aquisition of assets

1 January 2005 92 337 1 096 163 1 688 (Charged)/credited to the income statement 36 0 383 0 419 Charged to equity 0 0 1 0 1 Acquisition and sale of subsidiaries 5 0 52 3 60 Exchange differences 0 0 2 51 53 31 December 2005 133 337 1 534 217 2 221 (Charged)/credited to the income statement -41 31 -14 -304 94 -234 Charged to equity 0 0 0 15 0 15 Acquisition and sale of subsidiaries 362 0 29 5 -27 369 Exchange differences -1 5 7 29 0 40 31 December 2006 320 169 359 1 279 284 2 411

Deferred tax assets are allocated as follows: Amounts in NOK million 2006 2005

Aker Kværner 552 851 Aker Yards 553 247 Aker Seafoods 159 105 Aker BioMarine 68 0 Aker ASA and Holdingcompanies 762 772 Other companies 1) 317 246 Total 2 411 2 221

1) Deferred tax asset in other companies in 2006, relates mainly to the subsidiaries Cork Oak Holding and Aker Material Handling

Aker ASA Annual report 2006 69 Annual accounts Group

Aker Kværner Total taxable loss in Aker Kværner is NOK 5 676 million (of this NOK 5 340 million related to Norway) after deduction of loss carryforwad not recognised the the balance sheet. Deferred tax losses are recognised in the balance sheet to the extent that forecasts and realistic expectations about results show that Aker Kvaerner will be able to use the tax losses before they expire.

Aker Yards Aker Yards deferred tax asset recognised in the balance sheet includes NOK 87 million related to Norway, NOK 327 million related to France and NOK 140 million to Germany. Total loss carryforward not recognised in the balance sheet at end 2006 is NOK 195 million after recognition of deferred tax assets of NOK 58 million in Aker Yards Germany. The deferred tax asset of tax losses carried forward in Aker Yarrds Germany has previously not been accounted for as there have been uncertainties regarding the utilization of the tax losses. Deferred tax asset in France is related to acquisition of Aker Yards France. Fair value adjustments refers to mainly shortterm provisions on projects and deferred tax assets is associated with these projects.

Aker Seafoods A deferred tax asset have been recognised in 2006 balance sheet after an evaluation of the integration with the West Fish Aarsether Group . At this the entire amount in deferred tax asset is accounted for. Total deferred tax asset is NOK 159 million while the companys taxable income is NOK 98 million. The main part of the tax asset originate from West Fish Aarsether Group and from the period before the merger with Aker Seafoods. The Board expects the future taxable income to maintain at current level and the loss carry forward be utilized within a 5 year period.

Aker Biomarine Deferred tax asset of NOK 68 million refers to NOK 46 million related to temporary differences in receivables of NOK 163 million and NOK 22 million related to loss carry forward in Norway of NOK 78 million. The management expect the loss carry forwar to be utilized.

Aker ASA and Holding companies, Cork Oak Holding and Aker Material Holding. Deferred tas asset in Aker ASA and Holding companiies is NOK 762 million and Cork Holidng NOK 257 million. After continuous evaluation of the companies possibilites in utilization of the loss carryforward the company have managed during the last three years to reduce the amount not recognised in the balance sheet to NOK 699 million. Total deferred taxassets in Aker ASA and Holding, Cork Oak Holding and Aker Material Handling of NOK 1 303 million are not accounted for in the balance sheet. Total deferred tax assets not recognised in the Aker ASA Group at year end 2006 are NOK 2.136 million.

Deferred tax liabilities:

Accelereated Fair value Convertible Other 1) Total Amounts in NOK million tax depreciation Projects gains bond

1 January 2005 -218 -682 -264 -7 655 -515 (Charged)/credited to the income statement 74 -85 0 1 200 191 Charged to equity 0 0 0 0 -58 -58 Acquisition and sale of subsidiaries -112 2 0 0 -213 -323 Exchange differences 24 33 0 0 7 64 31 December 2005 -232 -732 -264 -6 352 -643

(Charged)/credited to the income statement -7 -746 0 0 730 -23 Charged to equity 0 0 0 6 -89 -83 Acquisition and sale of subsidiaries 2 -15 -128 0 0 -141 Exchange differences 7 -20 0 0 27 54 31 December 2006 -230 -1 473 -392 0 1 259 -836

1) Deferred tax assets and liabilites are offset if they are reversible in the same period and relate to same tax government. Other include NOK 5 348 million in loss carryforward offset by positive temporary differences in Aker Kværner.

Deferred tax recognised directely in equity

Amounts in NOK million 2006 2005

Relating to available-for-sale financial assets -7 -7 Relating to financial instruments -80 -51 Relating to merger cost 13 Relating to convertible bond 6 Total - -68 -58

Income tax payable NOK 287 million is maninly related to Aker Kværner NOK 230 million and Aker Yards NOK 40 million.

70 Aker ASA Annual report 2006 Annual accounts Group

NOTE 11: PROPERTY, PLANT AND EQUIPMENT

Movements in property plant and equipment for 2006 are shown below:

Ships, Machinery Buildings Under Other Amounts in NOK million airplanes, etc Vehicles Housing Land construction assets Total

Cost balance at 1 January 2006 1 710 2 936 3 262 307 799 281 9 295 Acquisitions through business combinations 11 267 525 132 11 71 1 018 Other acquisitions 379 1 153 289 7 1 310 13 3 150 Disposals -271 -1 407 -259 -1 -10 0 -1 949 Transfer from work in process -46 124 167 58 -329 28 0 Effect of movements in foreign exchange -102 62 72 27 -55 -11 -7 Cost balance at 31 December 2006 1 679 3 135 4 057 530 1 726 382 11 508

Depreciation and impairment losses at 1 January 2006 -540 -962 -1 164 0 -35 -71 -2 772 Depreciation charge for the year 2) -94 -585 -223 -6 34 -15 -888 Impairment losses recognised in profit or loss -40 -5 0 0 0 0 -45 Impairment losses reversed in profit og loss 0 0 0 0 0 0 0 Disposals 205 1 094 194 0 -28 0 1 464 Effect of movements in foreign exchange 34 -20 -29 1 0 -10 -23 Depreciation and impairment losses at 31 December 2005 -435 -478 -1 222 -5 -28 -94 -2 265 Carrying amount at 31 December 20061) 1 244 2 657 2 834 525 1 698 288 9 243

1) Book value leasing agreements recorded in the balance sheet: 0 79 0 0 0 0 79

Movements in property plant and equipment for 2005 are shown below: Ships, Machinery Buildings Under Other Amounts in NOK million airplanes, etc Vehicles Housing Land construction assets Total

Cost balance at 1 January 2005 1 842 2 432 2 939 261 109 264 7 847 Acquisitions through business combinations 0 200 187 49 180 7 623 Other acquisitions 138 697 89 7 517 17 1 465 Disposals -638 -474 -13 -10 0 0 -1 135 Effect of movements in foreign exchange 368 81 60 0 -7 -7 495 Cost balance at 31. December 2005: 1 710 2 936 3 262 307 799 281 9 295

Depreciation and impairment losses at 1 January 2005 -499 -737 -908 0 -32 -56 -2 232 Depreciation charge for the year 2) -123 -505 -176 0 -3 -14 -821 Impairment losses recognised in profit or loss -1 -10 0 0 0 0 -11 Impairment losses reversed in profit og loss -2 2 1 0 0 0 1 Disposals 138 345 -56 0 0 0 427 Effect of movements in foreign exchange -53 -57 -25 0 0 -1 -136 Depreciation and impairment losses at 31 December 2005 -540 -962 -1 164 0 -35 -71 -2 772

Carrying amount at 31 December 2005 1) 1 170 1 974 2 098 307 764 210 6 523

1) Book value leasing agreements recorded in the balance sheet: 0 71 2 0 0 0 73

Depreciation period 20-30 years 3-20 years 10-50 years Depreciation method Linear Linear Linear

2) Inclusive Pulp & Power

Aker ASA Annual report 2006 71 Annual accounts Group

NOTE 12: INTANGIBLE ASSETS

Movements in intangible assets for 2006 are shown below: Other Amounts in NOK million Goodwill intangibles Total

Cost balance at 1 January 2006 8 262 1 557 9 819 Acquisitions through business combinations 0 92 92 Other acquisitions 1 627 597 2 224 Disposals -1 007 -35 -1 042 Reclassification - -33 -33 Neagtive goodwill -375 -375 Effect of movements in foreign exchange 38 -3 35 Cost balance at 31 December 2006 8 545 2 175 10 720

Amortisation and impairment losses at 1 January 2006 -861 -160 -1 021 Amortisation for the year - -26 -26 Neagtive goodwill recognised in profit & loss 379 379 Impairment losses recognised in profit or loss -82 - -82 Impairment losses reversed in profit og loss - - - Disposals - 7 7 Effect of movements in foreign exchange 10 -2 8 Depreciation and impairment losses at 31 December 2006 -554 -181 -735

Carrying amount at 31 December 2006 7 991 1 994 9 985

The carrying amount of other intangibles of NOK 1 994 million at the end of 2006 refers to mainly fishing licenses in Aker Seafoods of NOK 911 million and future earnings on contracts for product tankers in Aker American Shipping of NOK 681 million.

The licences are not depreciated but are subject to impairment testing. The product tanker contract is depreciated linearly over 25 years from January 2007

Aker Seafoods At the end of 2006, the Aker Seafoods Group owns 28.3 cod licenses, 6 shrimp licenses and 2 greater silver smelt licenses. In 2006 a cod license entitled the holder to harvest 735 tons of cod, 456 tons of haddock and 652 tons of saithe north of the 62nd parallel. In addition another 120 tons of cod was granted per vessel as a district quota. Aker Seafoods operated 14 vessels in 2006. The shrimp licenses and greater silver smelt licenses are not limited by quantity.

In connection with the presentation of the 2006 financial statements, an external valuation of the licenses was performed. The cod licenses were valued at NOK 44 million per license, the shrimp licenses at NOK 2 million per license and the greater silver smelt licenses at NOK 5 million per license. The value assessments is based on the market value of this type of licenses.The fishing licenses are associated with delivery obligations in the area covered by the licencing rights, Nordland an Finnmark. These obligations are considered in the assessment of the licence values.

Aker American Shipping In connection with Akers acquisition of Aker American Shipping the excess value was allocated to the contracts for building product tankers. Aker American Shipping has contracts to build 10 product tankers and options for additional contracts. Aker American Shipping has entered into bareboat charter for 10 product tankers with a subsidiary of Overseas Shipholding Group. The first ship was delivered in February 2007 and the 10th ship will be delivered during 2010. An agreement of additional six tankers have been signed, the last ship to be deliverd in 2012.

Acquisition of Natural: Aker owned as per 5.October 41,9 % of the shares after acceptance of a volunatary bid. An agreement was made with Life Capitol on 16.November to purchase their remaining shares and in addition 2,8 million shares were bought in the market. Aker controlled after this 89,14 % of the shares in Natural. Fair value adjustment is allocated to the company's license agreements which are of 10 to 12 years duration. Goodwill is allocated to the company's knowledge of Omega3 phospholipids.

72 Aker ASA Annual report 2006 Annual accounts Group

Movements in intangible assets for 2005 are shown below: Other Amounts in NOK million Goodwill intangibles Total

Cost balance at 1 January 2005 8 098 490 8 588 Acquisitions through business combinations 22 1 014 1 036 Other acquisitions 101 43 144 Disposals -5 - -5 Effect of movements in foreign exchange 46 10 56 Cost balance at 31 December 2005 8 262 1 557 9 819

Amortisation and impairment losses at 1 January 2005 -787 -133 -920 Amortisation for the year - -27 -27 Impairment losses recognised in profit or loss -68 -2 -70 Impairment losses reversed in profit og loss - 1 1 Disposals - - - Effect of movements in foreign exchange -6 1 -5 Depreciation and impairment losses at 31 December 2005 -861 -160 -1 021

Carrying amount at 31 December 2005 7 401 1 397 8 798

Research and development at Aker mostly relates to ongoing projects, and is expensed. See note 6.

The amortisation and impairment charge is recognised in the following lines in the income statement:

Amounts in NOK million 2006 2005

Depreciation and amortization -26 -27 Impairment changes and non recurring items -82 -70 Total -108 -97

Allocation of goodwill

Amounts in NOK million 2006 2005 Aker Kværner: Field Development (FD) 1 539 1 539 Maintenance, Modifications and Operations (MMO) 1 664 1 664 Subsea, Products & Technologies (SPT) 891 869 Process (PRO) 1 095 1 095 Pulping & Power (P&P) - 949 TH Resource 640 - Other activitiest in Aker Kværner 453 374 Aker Yards 702 496 Aker Floating 417 Other 590 415 Total 7 991 7 401

The amount of goodwill related to Aker Kværner originate from a number of historic transactions, mainly the acquisitions of Trafalgar House in 1996 and Aker Maritime in 2002, and the establishment of Aker in 2004, but also from a number of other acquisitions. Subsequent the group has been reor- ganised many times, including mergers and de-mergers of individual businesses, following which it is not longer possible to identify individual businesses from past acquisitions to enable allocation of goodwill from individual acquisitions to individual businesses. Consequently, we have identified Business Areas as the lowest identifiable cash generating units for this purpose.

Goodwill in Aker Yards is related to Aker Yards Finland NOK 159 mill, Aker Yards Germany NOK 58 mill, Aker Yards Norway NOK 111 mill, Aker Yards Brevik NOK 124 mill and Aker Ukraine NOK 250 mill. Negativ goodwill of NOK 375 million arising from the acquisition of Aker Yards France has been recognised in the profit and loss in 2006. See note 3 for description of the transaction related to the acquisiton.

Following the August 2006 acquisition of the Yard and as part of the introduction of the Group’s standard procedures and systems for project follow- up, it became clear that the productivity of ongoing projects was below expectations. Further, errors in project calculations were identified. Thus, goodwill of NOK 28 million has been written down.

When carrying out the analyzes of the business combination when establishing Aker Yards, deferred tax assets related to accumulated loss carried forward in Aker Yards Germany on the date of business combination not fully accounted for due to uncertainties about future utilization.As a consequence of the improved order situation in Aker Yards Germany future utilization of loss carried forward is made plausible. In 2006 a deferred tax asset is taken to income related to accumulated losses before the business combination with NOK 54 million (2005: NOK 68 million). The book value of goodwill is adjusted accordingly. The reduction in goodwill is expensed as impairment of goodwill.

Impairment test is based on cash flow projections based on fianancial budgets and strategical figures and a discount rate according to Aker policy.

Other goodwill is mainly related to Aker Seafoods NOK 160 million, Aker BioMarine NOK 157 mill and companies within Aker Material Handling Group. Testing of values indicates that no write down for impairment will be necessary.

Aker ASA Annual report 2006 73 Annual accounts Group

Determination of recoverable amounts: Aker Kværner: Recoverable amounts are based on value in use calculations. The calculations use cash flow projections based on budgets and views for 2007-2009. Cash flows for a further seven-year period are extrapolated by a 2.5 percent growth rate which is appropriate for a long-term business. An enterprise value is calculated by discounting the projected cash flows by a pre-tax discount rate of 14.6 percent. For all businesses the recoverable amounts are higher than the carrying amounts and consequently, the analysis indicates that no write-down for impairment is necessary. As a sensitivity analysis, value in use has also been calculated with discount rates up to 25 percent annually, without any effect for the conclusions.

Aker Yards: Aker Yards has defined the following cash generating units with goodwill: Aker Yards Norway, Aker Yards Brevik, Aker Yards Germany, Aker Yards Ukraine, Aker Yards Florø and Aker Yards Finland. It has been performed impairment testing for each cash generating unit by 31. December 2006. With exception of Aker Yards Florø, it has not been identified units where impairment of goodwill has to be carried out. Goodwill in Aker Yards Germ- any is reduced due to reallocation to deferred tax asset.

The impaiment testing is based on a value in use calculation. Value in use is calculated based on cash flow projections based on financial budgets and strategical figures approved by senior management covering the period of 2007 to 2009. Determing budget and strategical figures is based on long term construction contracts and their margins and expectations of new contracts. Aker Yards are almost fully booked in several years to come. This is reflected in the budget and strategical figures. The discount rate applied to cash flow is 14% before tax and terminal value is based on long term strategicak figures and using a growth rate of 0% in the terminal year.

The same assumptions are applied for determine value in use for the different cash generating units.

Aker Floating: The recoverable amount is based on a cash flow projection for the years 2007 to 2017, after which a steady state revenue was assumed. The revenue was projected at about USD 4 million in the first year, increasing to a maximum of about USD 240 million in 2011. The revenue was then projected to taper off to a steady state of about USD 170 million taking into consideration the effect of lease contracts entering into their option phases. Due to the early stage of the company, an annual cost increase of 5 % has been assumed from 2008 to 2011. From 2012 onwards an annual cost increase of 2% has been assumed. Due to 'the nature of a steady revenue lease business, a negative earnings growth of 0,3 % has been assumed for perpetuity. A pre tax discount rate of 10% has been applied in determining the recoverable amount. The calculated enterprise value at this discount rate is significantly higher than book values.

The estimates are particulary sensitive to the following areas: An increase in the pre tax discount rate of one percentage point would have decreased the enterprise value by USD 74 million. A 10 percent decrease in revenues would have decreased the enterprise value by USD 168 million. Even these significant decreases in calculated enterprise value would not have changed out conclusion

Other: Recoverable amounts are based on value in use calculations. The calculations use cash flow projections based on budgets and strategically figures. Value is calculated by discounting the projected cash flows. Testing of values indicates that no write down for impairment will be necessary.

NOTE 13: INVESTMENTS IN ASSOCIATES

Amounts in NOK million 2006 2005 Beginning of the year 1 191 631 Acquisitions / Disposals 279 585 Share of loss/profit 1 28 Exchange differences 0 4 Other equity movements 173 -57 End of the year 1 644 1 191

The movements of investments in associates companies are allocated on companies as follows: Other 2006 Balance beginning Acquisitions Share of loss/ Exchange equity Balance end Amounts in NOK million of the year and disposals profit differences movements of the year Kværner Powergas India 53 -51 2 - -4 - Bjørge ASA 205 - -4 - -5 196 Aker Drilling ASA 770 - -7 - -29 734 Aker Exploration 448 - - - 448 Odim ASA 133 3 136 Norsea AS 60 -296 28 - 208 - Supply Invest KS 37 -37 - - - - P/f Næraberg - - -1 - 1 - Siva Verdal Eiendom 13 - - - - 13 RR Offshore Oy 32 - -16 - - 16 JSC Astrakhan Korabel - 31 - - - 31 Power Maintenance and Constructors, LLC - 19 - - - 19 Other companies 21 32 -3 - 2 51 Total 1 191 278 2 - 173 1 644

74 Aker ASA Annual report 2006 Annual accounts Group

Acquisistion and disposals: Kværner Powergas India became subsidiary from February 2006. Reduction in shares in Aker Exploration December 2006. Odim ASA associated company from May 2006. Sale of NorSea in December 2006 NOK 296 million and gain on sale of NOK 220 million. A shareholder loan of NOK 60 million was settled at the same time.

Other equity movements: Bjørge ASA NOK 5 million dividend received in 2006. Aker Drilling equity adjustment of NOK 29 million refer to 30,8% share of result from sale by companies in Aker Group. NorSea: NOK 220 million in sales gain less dividend received in 2006 NOK 12 million

Investment in associates at 31 December 2006 include excess value of NOK 127 million that is allocated to other intangible assets.

The movements of investments in associates companies are allocated on companies as follows:

Other 2005 Balance beginning Acquisitions Share of loss/ Exchange equity Balance end Amounts in NOK million of the year and disposals profit differences movements of the year Kværner Powergas India 56 -25 18 4 53 Kværner ASA 417 -395 -22 0 Bjørge ASA 203 2 205 Aker Drilling ASA 771 -1 770 NorSea AS 94 33 -67 60 Supply Invest KS 37 37 Siva Verdal Eiendom 13 13 RR Offshore Oy 0 32 32 Other companies 14 -1 -2 4 6 21 Total 631 585 28 4 -57 1 191

Other equity movements of NOK 67 million in Norsea AS consist of NOK 67 million of dividend received in 2005. Investment in associates at 31 December 2005 include excess value of NOK 126 million that is allocated to other intangible assets. Summary financial information on associates and the group's interest in its principal associates is shown below.

Listed companies are Aker Drilling ASA, Bjørge ASA and Odim ASA.

The quoted price at Oslo Stock Exchange and Aker's market value of the investments in Bjørge ASA, Aker Drilling ASA and Odim ASA is shown below:

Number of shares Share price (NOK) Carrying value Market value Amounts in NOK million in million 28 Feb 2007 31 Dec 2006 28 Feb 2007 Bjørge ASA 17,5 17,50 196 307 Aker Drilling ASA 28,6 30,80 734 883 Odim ASA 2,6 170,00 136 445

2006 Profit for Amounts in NOK million Country Assets Liabilities Revenues the year % interest held Aker Drilling ASA Norway 4 151 827 0 -22 30,8 Bjørge ASA Norway 638 423 1 258 43 39,9 Aker Exploration ASA Norway 1 456 481 0 -8 49,9 Odim ASA Norway 666 424 879 106 23,41 P/f Næraberg 1) the Faroe Islands 780 840 202 -4 33,3 RR Offshore Oy Finland 83 86 251 -31 26,0 Siva Verdal Eiendom 2) Norway 42 8 4 2 46,0 JSC Astrakhan Korabel Astrakhan, Russland 95 88 26 -7 56,0 Power Maintenance and Constructors, LLC Hammond, USA 68 30 398 -3 49,0

1) Aker BioMarine ASA, a subsidiary of Aker ASA has NOK 328 million in interest bearing receivable on P/f Næraberg. 2) 40% of the votes.

2005 Profit for Amounts in NOK million Country Assets Liabilities Revenues the year % interest held Kværner Powergas India India 196 86 170 -16 49,0 Aker Drilling ASA Norway 4 123 777 0 -3 30,8 Bjørge ASA Norway 557 371 891 31 39,9 NorSea AS Norway 1 480 1 293 1 091 110 33,5 Supply Invest KS Norway 167 9 69 -1 22,7 P/f Næraberg the Faroe Islands 601 656 115 15 33,3 RR Offshore Oy Finland 111 82 284 4 26,0 Siva Verdal Eiendom Norway 40 8 7 3 46,0

1) Aker Seafoods Holding AS, a subsidiary of Aker ASA has NOK 283 million in interest bearing receivable on P/f Næraberg.

Aker ASA Annual report 2006 75 Annual accounts Group

NOTE14: INVESTMENT IN JOINT VENTURES

The group has interests in several joint venture activities, whose principal activities are construction contracts. The group's share of assets and liabilities, revenues and expenses of the joint ventures operating agreements and entities are included in the consolidated financial statements. The main activities are 50% in Aker Reinertssen AS and 40% in AKCS Offshore Partner.

Amounts in NOK million 2006 2005

Current assets 42 44 Current liabilities -37 -44 Net assets / liabilities 5 0

Income 264 12 Expenses -260 0 Total 4 12

NOTE 15: SHARE INVESTMENTS

Other share investments comprise the following items:

Amounts in NOK million 2006 2005

Odim ASA 1) - 43 Northzone III AS 2) - 44 AAM Absolute fund 2) - 45 Island Offshore K/S 18 14 Olympic Subsea K/S 15 Olympic Nor K/S - 12 Olympic Electra K/S 8 Other companies 222 77 Total 263 146

Shares in other companies is classified as available for sale and is valued to fair value.

1) Odim ASA is an associated company from May 2006. 2) Reclassified to current shares during 2006.

NOTE 16: INTEREST-BEARING LONG-TERM RECEIVABLES

Financial interest-bearing long-term receivables consist of the following items:

Amounts in NOK million 2006 2005

Restricted deposits 107 124 Loans to employees 1) 15 17 Other interest-bearing long-term receivables 2) 362 879 Total 484 1 020

The maturity of interest-bearing long-term receivables is described in note 35.

1) Average interest rate for loans to employees is 3,3 percent in 2006 and 3,5 percent in 2005. 2) Here of receivable on the associated company P/f Næraberg of NOK 288 million.

NOTE 17: OTHER NON-CURRENT ASSETS

Other non-current assets consist of the following items:

Amounts in NOK million 2006 2005

Receivable on Sea Launch 1) - 198 Subscription rights 37 Prepayments property, plants and equipment 129 Other interest-free long-term receivables 74 116 Total 240 314

1) The receivable has been written down in 2006. Aker has also issued guarantees totalling USD 130,5 million related to loans to Sea Launch from third parties and advance payments from clients related to ongoing contracts.

76 Aker ASA Annual report 2006 Annual accounts Group

Total Other fixed assets and Financial interest bearing fixed assets are classified as follows: Amounts in NOK million 2006 2005

Fair value with changes through profit & loss 0 0 Available for sale 37 0 Hold to maturity 0 0 Loans and receivable 687 1 334 Total 724 1 334

NOTE 18: INVENTORIES

Inventory comprises the following items: Amounts in NOK million 2006 2005

Raw materials 1 072 862 Work in progress 89 945 Finished goods 358 449 Total 1 519 2 256

Write-down of inventories recognised as an expense during the period 3 12 Reversals of any write-down that is recognised as a reduction in expense in the period 1 8

NOTE 19: CONSTRUCTION CONTRACTS

Activities in Aker Yards, Aker Kværner, Aker American Shipping and other areas are largely based on deliveries under contracts with customers. The order backlog represents an obligation to deliver goods not yet produced, and gives Aker contractual rights for future deliveries. If projected costs are higher than projected income, the total projected loss on the contract is recorded to costs. The operations in Aker Material Handling is also to a certain extent based on deliveries under contracts with customers, but the contracts are of short duration compared to construction contracts in the other companies.

Summary financial information on projects are presented below. Amounts in NOK million Pr 31. Des. 2006 2006 Pr 31. Des. 2005 2005

Aker Kværner 59 695 62 271 48 522 51 937 Aker Yards 79 420 47 892 38 897 32 084 Aker American Shipping 4 089 - 5 830 - Aker Material Handling 386 1 670 303 1 391 Total 143 590 111 833 93 552 85 412

Result and other key figures of the construction contracts specified by company: 2006 Aker Aker Aker American Øvrige Amounts in NOK million Kværner Yards Shipping selskaper Sum

Contract revenue 33 303 24 198 236 - 57 737 Contract expenses -75 0 - -1 -76 Other financial information related to construction contracts as of 31. Dec. Contract costs incurred and recognised profits(over the contracts lifetime) 64 901 18 834 922 - 84 657 Advances received 5 261 11 298 - - 16 559 Amounts receivables withheld by the customers in accordance with the contract (retention) 3 - 21 - 24 Provisions for loss contracts see note 31 26 166 0 - 192

2005 Aker Aker Aker American Øvrige Amounts in NOK million Kværner Yards Shipping selskaper Sum

Contract revenue 22 785 15 672 345 - 38 802 Expected losses recognized -48 -66 - - -114 Recognized net profit (EBITA) Other financial information related to construction contracts as of 31. Dec. Contract costs incurred and recognised profits(over the contracts lifetime) 42 316 12 510 1 686 - 56 512 Advances received 5 241 7 589 - - 12 830 Amounts receivables withheld by the customers in accordance with the contract (retention) 22 - 23 - 45 Provisions for loss contracts see note 31 132 66 0 0 198

Aker ASA Annual report 2006 77 Annual accounts Group

Largest projects in progress Project Customer Estimated Delivery Aker Kværner Ormen Lange MIC Norsk Hydro 2007 Kashagan EPF Agip 2007 Snøhvit Statoil ASA 2007 Tampen V&M Statoil ASA 2007 Dalia EPC Total E&P Angola 2007 Hitachi Hitachi Americal Limited 2007 West-E Drill Samsung 2007 Blind Faith Chevron and Kerr McGee 2007 H6e Drilling rigs Aker Drilling 2008 Frigg Decommissioning Total E&P Norge 2008 Adriatic LNG Project Terminale GNL Adriatico s.r.l 2008 Aker Drilling Aker Drilling 2008 Sempra Cameron 2008 Yansab Yansab 2008 Reliance Reliance Ltd. 2008 Statfjord Late Life Statoil ASA 2009 Dalia Subsea Phase II Total E&P Angola 2009

Aker Yards The activities in Aker Yards consist mainly of deliveries according to customer's orders and the order backlog at year end 2006 per business segment is as follows:

Not audited Order backlog Order income Amount in NOK million Pr 31. Des. 2006 2006 Cruiseship and ferries 46 097 24 377 Merchant vessels 13 858 5 366 Offshore & specialized vessels 19 465 18 149 Total 79 420 47 892

Aker American Shipping At year end 2006 the company have contracts of building of 10 product tankers

NOTE 20: TRADE AND OTHER INTEREST-FREE RECEIVABLES

Trade and other interest-free receivables consist of the following items: Amounts in NOK million 2006 2005

Trade receivable 6 901 6 012 Fair value derivatives (see note 36) 30 - Other short-term interest-free receivables 7 677 4 290 Total 14 608 10 302

In 2006 the group has recognised a impairment loss in trade receivables of NOK 2 million (2005:NOK 3 million). The loss has been included in other operating expenses in the profit and loss. It has been made provisions of NOK 29 mill for impairment loss Other short-term interest-free receivables consist mainly of advance payment to suppliers and withheld payments from customers where the payment will take place at the end of the warranty period.

NOTE 21: INTEREST-BEARING SHORT-TERM RECEIVABLES

Interest-bearing short-term receivables consist of the following items: Amounts in NOK million 2006 2005

Interest-bearing short-term receivables with interest rate Adjustment period exceeding one year - - Other Interest-bearing short-term receivables 836 832 Total 836 832

Other Interest-bearing short-term receivables is measured to fair value. The change in fair value is recongnised in the profit and loss statement. Other Interest-bearing short-term receivables consist mainly of bonds and other receivables. The bonds have an interest rate of 3,06 %, whereas the main part of other receivables has an interest of 1,8%

78 Aker ASA Annual report 2006 Annual accounts Group

NOTE 22: CASH AND CASH EQUIVALENTES

Cash and cash equivalentes consist of the following items: Amounts in NOK million 2006 2005

Cash and bank deposits 14 987 12 328 Short-term investments with terms less than 3 months - 51 Cash and cash equivalentes 14 987 12 379

Short-term investments are made for varying periods of between one day and three months depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.

Cash and cash equivalentes are allocated as follows: Amounts in NOK million 2006 2005

Aker Kværner 5 666 6 746 Aker Yards 6 247 3 914 Aker American Shipping 66 173 Aker Seafoods 150 226 Aker Material Handling 57 74 Aker Bio Marine 816 Aker Floating Production 636 Other companies 454 144 Aker ASA and holding companies 895 1 102 Total 14 987 12 379

There are restrictions on the cash transfer between Aker ASA and Holding companies and the subsidaries Aker Kværner, Aker Yards, Aker American Shipping, Aker Seafoods, Aker BioMarine and Aker Floating Production.

The cash and cash equivalentes includes restricted deposites of NOK 42 million in Aker Kværner, NOK 1 806 million in Aker Yards and NOK 293 million in Aker ASA and holding companies. Restricted deposits in Aker Yards are mainly related to projects and bank guarantees made to customer for advanced payments.

Restricted deposits in Aker ASA and holding companies include NOK 223 million as guarantee of the Warnow claim (see note 36).

NOTE 23: EARNINGS PER SHARE AND DIVIDEND PER SHARE

EARNINGS PER SHARE Basic earnings per share The basic earnings per share at 31 december 2006 are based on the profit attributable to ordinary shares of NOK 1435 million (2005: NOK 1614 million, 2004: NOK 380 million), and the weighted average number of ordinary shares outstanding in 2006 of 72,6 million (2005: 76,6 mill and 2004: 77,0 million) calculated as follows:

Amounts in NOK million 2006 2005 2004

Profit for the period 1 435 1 614 380 Profit attributable to ordinary shares 1 435 1 614 380

Issued ordinary shares at 1 January 2005/30 April 2004 A 114 775 441 86 532 067 86 532 067 Effect of own shares held B -42 408 067 -9 560 192 -9 560 192 Effect of merger between Aker and Kværner 30 November 2005 0 -4 604 501 Total 72 367 374 72 367 374 76 971 875

Allocation: Issued ordinary shares at 31 December 2005 114 775 441 114 775 441 Effect of own shares held B-shares -42 400 713 -42 400 713 Effect of own shares held A-shares -7 354 -7 354 Total 72 367 374 72 367 374 0

Weighted average number of ordinary shares at 31 December72 367 374 72 367 374 76 588 167 76 971 875

Diluted earnings per share There was no potentially dilutive securities outstanding as of 31 December 2005 and 31 December 2006.

DIVIDEND PER SHARE Paid dividend in 2006 and 2005 was respectively NOK 470 million (NOK 6,50 per share) and NOK 1 013 million (NOK14,00 per share). A dividend of NOK 19,00 per share will be proposed at the Annual General Meeting on 29 March 2007.

Aker ASA Annual report 2006 79 Annual accounts Group

NOTE 24: PAID IN CAPITAL

As of 31 Dec 2006 Aker ASA's share capital consists of the following share classes:

Total par value (in NOK million) Number Shares Par value Shares Shares Shares issued own shares outstanding (in NOK) issued outstanding

A-shares 72 374 728 7 354 72 367 374 28 2 026 2 026 B-shares 1) 42 400 713 - 42 400 713 28 1 187 1 187 Total share capital 114 775 441 7 354 114 768 087 3 214 3 214

Share premium fund 2 071 Other paid-in capital 3 236 Total paid-in capital 8 521

All shares are entitled to dividend. The A-shares has equal voting power except that Aker ASA has no voting power for their A-shares owned.

1) The B-shares are owned 100% by the subsidiary Aker Maritime Finance AS. The B-shares do not have any voting power.

Dividend After the balance sheet date the following dividends were proposed by the directors. The dividends have not not been provided for and have no income taxes consequences.

Amounts in NOK million 2006

Proposed dividend in 2006 19,00 per share 2181 Expected payment of dividend to the subsidiary Aker Maritime Finance of NOK19,00 per B-share 806 Expected paid dividend in 2006 for the group 1 375

Overview of the 20 largest shareholders as 5 February 2007 (A-shares).

Number of shares % TRG Holding AS 48 245 048 66,66 JP Morgan Chase Bank 2 156 449 2,98 Bank Of New York 1 658 411 2,29 Reka AS 1 200 000 1,66 The Resource Group 824 642 1,14 Morgan Stanley 757 412 1,05 Nordea Bank Sweden 688 443 0,95 JP MBLSA Nordea 553 400 0,76 Skandinaviska Enskilda A/C 537 696 0,74 Skandinaviska Enskilda Oslo 400 002 0,55 Vital Forsikring ASA 385 982 0,53 Nordea Bank Plc 352 722 0,49 CIP- Resolution Asset 331 824 0,46 Bank Of New York, BR 300 740 0,42 Spencer Trading Inc 300 000 0,41 Clearstream Banking 245 538 0,34 Morgan Stanley & Co 217 284 0,30 Voldberg Tore Aksel 200 002 0,28 DnB Nor Norge 192 324 0,27 SIS Segaintersettle 177 980 0,25 Total 59 725 899 82,53

80 Aker ASA Annual report 2006 Annual accounts Group

NOTE 25: GROUP ENTITIES The largest subsidiaries in the Aker Group accounts are presented in the table below. Company shareholdings owned directly by Aker ASA are emphasized. Group's Group's share Business address ownership (in %) of votes (in %) City/Location Country Aker Kværner ASA 50,01 50,01 Lysaker Norway Aker Kværner Elektro AS 50,01 50,01 Stavanger Norway Aker Kværner Offshore Partners AS 50,01 50,01 Stavanger Norway Aker Kværner Subsea AS 50,01 50,01 Lysaker Norway Aker Kværner Stord AS 50,01 50,01 Stord Norway Aker Kværner MH AS 50,01 50,01 Kristiansand Norway Aker Kværner Well Services AS 50,01 50,01 Stavanger Norway Aker Kvæner E&C Group AS 50,01 50,01 Bærum Norway Aker Yards ASA 50,40 50,40 Oslo Norway Aker Yards AS 50,40 50,40 Brattvåg Norway Aker MTW GmbH 50,40 50,40 Wismar Germany Aker Finnyards Oy 50,40 50,40 Rauma Finland Aker Brevik AS 50,40 50,40 Brevik Norway Aker Yards Elektro AS 50,40 50,40 Brattvåg Norway Norway Seafoods Holding AS 100,00 100,00 Oslo Norway Aker Seafoods Holding AS 100,00 100,00 Oslo Norway Aker Seafoods ASA 65,90 65,90 Oslo Norway Aker Seafoods Finmark AS 65,90 65,90 Hammerfest Norway Aker Seafoods Melbu AS 65,90 65,90 Melbu Norway Aker Seafoods JM Johansen AS 65,90 65,90 Stamsund Norway Aker Seafoods Båtsfjord AS 65,90 65,90 Båtsfjord Norway Aker Seafoods Ålesund 65,90 65,90 Ålesund Norway Aker Seafoods Aarsæther Kjøllefjord AS 65,90 65,90 Kjøllefjord Norway Thorfisk AS 65,90 65,90 Grenå Denmark Norway Seafoods UK Ltd 65,90 65,90 Grimsby UK Aker BioMarine ASA 76,20 76,20 Oslo Norway Aker BioMarine Corp 76,20 76,20 Seattle USA Aker BioMarine Antarctic AS 76,20 76,20 Ålesund Norway Næraberg Holding AS 76,20 76,20 Oslo Norway Aker BioMarine Trading, Ltd 76,20 76,20 Cayman Island Cayman Island Natural ASA 76,20 76,20 Lysaker Norway EstreMar S.A. 76,20 76,20 Buenos AiresArgentina Aker American Shipping Holding AS 100,00 100,00 Oslo Norway Aker American Shipping ASA 53,20 53,20 Oslo Norway Aker Philadelphia Shipyard Inc 53,20 53,20 Philadelphia USA Aker American Shipping Inc 53,20 53,20 Philadelphia USA Aker American Shipping Corp 53,20 53,20 Philadelphia USA Aker Capital AS 100,00 100,00 Oslo Norway Aker Floating Production ASA 50,10 50,10 Oslo Norway Aker Mek Verksted 100,00 100,00 Oslo Norway Aker Material Handling AS 100,00 100,00 Oslo Norway Recondo AS 100,00 100,00 Oslo Norway Cork Oak Holding Ltd 100,00 100,00 Hertfordshire UK RGI (Europe) BV 100,00 100,00 Rotterdam Netherland RGI Inc. 100,00 100,00 Seattle USA Molde Fotball AS 100,00 100,00 Molde Norway

Minorities The Aker group contains several subsidiaries where Aker ASA and holding companies owns less than 100%. Main companies with minority shareholders per 31 December 2006 are Aker Kværner with 49,9%, Aker Yards with 49,6%, Aker Seafoods with 35,1%, Aker American Shipping with 46,8%, Aker Bio Marine 23,8% and Aker Floating Production with 49,9%. See note 4 for key figures for these companies.

Change in minorities during 2006 refers to the following: Effect of fair value Result value cash flow- Other Balance per Acquisitions & Minority- Effect of change hedging and equity Balance Amount in NOK million 1. January Disposals interesest in exchange rates equity instruments Dividend movements 31. Decmber

Aker Kværner 4 014 - 1 869 27 101 -137 - 5 874 Aker Yards 1 470 - 513 68 5 -174 221 2 103 Aker Seafoods 446 39 42 -2 -13 - 512 Aker American Shipping 782 - 29 -42 - 769 Aker BioMarine 1 165 - - 1 165 Aker Floating Production 836 -1 -9 826 Other companies 129 - 55 5 -52 108 245 Total 6 841 2 040 2 507 47 106 -376 329 11 494

Acquisition and disposals consist of income from sale of 880 000 Aker Seafoods shares in January 2006, private placement in Aker Floating Pro- duction in April 2006 and in Aker BioMarine in Desember 2006. Other equity movements in Aker Yards consist of conversion of loans to equity in quarter 1, 2006 and new minorities, purchase and release of minorites in among others Natural and Aker Kværner Powergas.

Aker ASA Annual report 2006 81 Annual accounts Group

NOTE 26: FOREIGN CURRENCY EXCHANGE RATES

In the consolidated accounts of Aker, the following exchange rates have been used in translating the accounts of foreign subsidiaries and associated companies: Average Rate at Average Rate at Country Currency rate 2006 31 Dec. 2006 rate 2005 31 Dec. 2005 Great Britain GBP 1 11,80 12,30 11,72 11,65 USA USD 1 6,41 6,26 6,44 6,75 Denmark DKK 100 107,89 110,40 107,45 107,16 Sweden SEK 100 86,98 90,94 86,33 84,70 The European Union EUR 1 8,05 8,24 8,01 8,01

In translating profit and loss account and balance sheet items, the average rate and rate at 31 December, respectively, have been used.

NOTE 27: INTEREST-BEARING LOANS AND LIABILITIES

This note provides information on contractual terms of the Group's interest-bearing loans and borrowings.

Amounts in NOK million 2006 2005

Non-current liabilities Secured bank loans 801 3 510 Unsecured bank loans 445 307 Secured bond issues 1 203 604 Unsecured bond issues 4 935 1 951 Convertible bonds 278 526 Finance lease liabilities 59 71 Loan from associate - - Other 2 065 1 217 Total non-current liabilities 9 786 8 186

Current liabilities Current portion of secured bank loans 1 209 110 2nd priority bond issue 2 329 Current portion of finance lease liabilities 19 14 Unsecured bank facility 118 211 Construction loans 4 795 4 036 Other 339 102 Total current liabilities 8 809 4 473

Total current liabilities 18 595 12 659

Interest-bearing loans and liabilities are allocated as follows:

Amounts in NOK million 2006 2005

Aker Kværner 4 455 2 112 Aker Yards including construction loan 7 929 5 957 Aker American Shipping including construction loan 906 605 Aker Seafoods 1 178 1 337 Aker Material Handling 145 387 Aker ASA med holdingselskaper 3 432 2 173 Other and eliminations 550 88 Total 18 595 12 659

82 Aker ASA Annual report 2006 Annual accounts Group

Change in interest bearing liabilities in 2006:

Amounts in NOK million Current Non-current Total

Interest bearing liabilities as of 1 January 2006 4 473 8 186 12 659 Change in construction loans 759 - 759 New bond issues in Aker ASA - 1 000 1 000 Sale of own bonds in Aker ASA - 446 446 Refinancing of syndicate loan in Aker Yards ASA - 696 696 New bond issues in Aker Kværner - 1 577 1 577 New bond issues in Aker Yards - 592 592 Other 121 67 188 Total proceeds from issuance of long and short term liabilities (excl. Construction loans) 121 4 378 4 499 Refinancing of syndicate loan in Aker Yards ASA - -290 -290 Other payments -164 -151 -315 Total repayments of long and short term liabilities -164 -441 -605 Conversion of convertible bonds in Aker Yards - -221 -221 Acquisition of subsidiaries in Aker Yards - Seller credit - 657 657 Acquisition of subsidiaries in Aker Kværner - Seller credit - 534 534 Other acquisitions/disposals of subsidiaries - 48 48 Total conversion and acquisition/disposals of subsidiaries - 1 018 1 018 Second priority lien notes in Aker Kværner to short-term 2 329 -2 329 - Other reclassifications / 1st year instalment 1 330 -1 330 - Currency translation differences and other changes -39 304 265 Interest bearing liabilities as of 31 December 2006 8 809 9 786 18 595

Subordinated debt in Aker Kværner repaid as part of the refinancing in December 2006 with NOK 3 535 milion was classified as non interest bearing and is not included in the table above.

Net interest-bearing debt comprise the following items:

Amounts in NOK million 2006 2005

Cash and bank deposits 14 987 12 379 Financial interest-bearing fixed assets 484 1 020 Interest-bearing short-term receivables 836 832 Deposit to repay second priority lien notes 2 411 - Total interest-bearing assets 18 718 14 231 Interest-bearing long-term debt 1) -9 786 -8 186 Interest-bearing short-term debt incl. Construction loans -8 809 -4 473 Total interest-bearing debt -18 595 -12 659 Net interest-bearing debt(-)/asset(+) 123 1 572

1) Subordinated debt as per 31.12.05 of NOK 3 167 million not included. Total redemption amount included interest, foreign exhange gain and share premium was NOK 3 535 million.

See note 35, Financial Instruments, for details of terms and conditions.

Finance lease liabilities

Finance lease liabilities are payable as follows:

Minimum lease Minimum lease lease lease payments Interest Principal payments Interest Principal Amounts in NOK million 2006 2006 2006 2005 2005 2005

Less than one year 25 4 21 21 3 18 Between one and five year 70 8 62 67 7 60 More than five years 6 - 6 12 1 11 Total 101 12 89 100 11 89

The main part of the financial lease liabilities relates to financing of machineries in Aker Material Handlings factories in the Netherlands and in Norway.

Aker ASA Annual report 2006 83 Annual accounts Group

NOTE 28: OPERATING LEASES

Non-cancellable operating lease rentals (leases as a lessee) are payable as follows:

Amount in NOK million 2006 2005

Less than one year 590 109 Between one and five years 1 816 792 More than five years 1 384 725 Total 3 790 1 626

The major part of the operating lease costs and commitments relate to rent of office facilities. Other lease costs include leasing of IT equipment where the Group has a three years agreement with Hewlett Packard International Bank PLC. There are no intention of purchase of the equipment and it cannot be subletted. The equipment is insured by the company against loss or damage. None of the leases include significant contingent rent.

Aker Yards Finland have a lease agreement with Helsinki City regarding rent of land related to the Helsinki Yard. The agreement is based on a price per square. Use of the ground is restricted to yard business and the ground can not be sub rented. The agreement expires 31. December 2010 and can be renewed after new negotiations.

Aker Material Handling leases cars, offices, warehouse and other buildings.

The rent agreement for Aker Hus is 12-years from 3 November 2007 with an option to renew the contract. Aker Hus will be able to accomodate 2100 employees.

Estimated minimum rent receivable for subletting agreements related to non terminable operational lease is NOK 0 as per 31. December 2006.

NOTE 29: PENSION EXPENSES AND PENSION LIABILITIES

The Aker Group's Norwegian companies mainly cover their pensions through group pension plans in life insurance companies. Under IAS 19 Employee Benefits, the plans have been treated for accounting purposes as defined benefit plans. The Group's companies outside Norway have pension plans based on local practice and regulations. Certain companies have pension plans for which the employer provides an agreed-upon contribution that is managed in separate pension savings plan, (defined contribution plans) or makes contributions that are included in joint plans with other employers (multi-employer plans). The contributions are recorded as pension expenses for the period. The Group also has uninsured pension liabilities for which provisions have been made. Actuarial calculations have been made to determine pension liabilities and pension expenses in connection with the Group's defined benefit plans.

The following assumptions have been made when calculating liabilities and expenses in Norway:

2006 2005 2004

Expected return 5,5 % 6,0 % 6,5 % Discount rate at 31 December 4,5 % 5,0 % 5,5 % Wage growth 4,3 % 3,0 % 3,0 % Pension adjustment 2,5 % 2,5 % 2,0 %

Pension expense recognised in the income statement:

Amounts in NOK million 2006 2005 2004

Current service cost -215 -264 -147 Interest cost -168 -237 -136 Expected return on pension funds 138 199 107 Amortization of actuarial gains and losses -13 -67 -4 Amortization of past service cost - - - Curtailment / Settlement -1 - - Pension expenses recognised from defined benefit plans -258 -369 -180 Contribution plans (employer's contribution) -345 -289 -258 Total pension expense recognised in the income statement -603 -658 -438

Net pension funds and liabilities: Amounts in NOK million 2006 2005

Defined Benefit obligation funded plans -3 748 -3 348 Defined Benefit obligation unfunded plans -853 -873 Fair value of plan assets 2 635 2 538 Calculated present value of net pension funds(+)/pension liabilities (-) -1 966 -1 683 Unrecognised net acturial gains and losses 682 340 Unrecognised Past service costs - - Net liability recognised in the balance sheet -1 284 -1 343

84 Aker ASA Annual report 2006 Annual accounts Group

Changes in net liability recognised in the balance sheet are as follows: Amounts in NOK million 2006 2005

Net liability at the beginning of the year -1 343 -1 196 IFRS changes Net expense recognised from defined benefit plans -258 -369 Pension contribution 24 270 Effect change pension plans - 7 Acquisition and sale 297 -52 Benefits paid - -2 Translation difference -4 -1 Net liability at the end of the year -1 284 -1 343 Pension funds 22 17 Pension liabilities -1 306 -1 360 Net liability at the end of the year -1 284 -1 343

Actual return on plan assets in 2006 and 2005 was respectively NOK 145 million and NOK 181 million.

The major categories of plan assets as a percentage of total plan assets are as follows: Percentage 2006 2005

Bonds 48,9 % 36,1 % Equity securities 9,2 % 7,1 % Money market instruments 39,6 % 54,2 % Other 2,3 % 2,6 % Total 100,0 % 100,0 %

The Group expects to contribute approximately NOK 279 million to pension funds in 2007.

Financial assumptions (Norwegian plans): The discount rate is based on the interest rate on Norwegian government securities. The return on the funds are expected to be higher than the discount rate as the capital is invested in securities with higher risk than the government securites. Experience data reveal that in the long term the return on investment have been approximately 1 % higher than the discount rate, we have therefore used an expected return of 5,5 %.

NOTE 30: OTHER LONG TERM INTEREST FREE DEBT

Other interest-free long-term liabilities comprise the following itmes:

Amounts in NOK million 2006 2005

Security reserve 293 195 Other interest-free long-term liabilities 63 262 Total 356 457

NOTE 31: PROVISIONS FOR LOSS CONTRACTS

Amounts in NOK million 2006 2005

Carrying amount at 1 January 198 196 Additional provisions 221 114 Amounts used -196 -114 Unused amounts reversed during the period -28 -5 Exchange adjustment -3 7 Effect of the discounted amounts - - Carrying amount at 31 December 192 198

Whereof: - amount to reduction of projects under construction 153 - - amount to short-term provision 39 198

Contract losses Any forseeable losses on signed construction contracts are expensed. Amounts recoverable on work in progress are written down before a provision for contract losses is recognised. The cash effect of any provisions will come over the projects' life time.

Aker ASA Annual report 2006 85 Annual accounts Group

NOTE 32: OTHER PROVISIONS

2006 Amounts in NOK million Warranties Restructuring Legal claims Other Total

Balance as of 1 January 2005 817 94 43 233 1 187 Acquition and sale of subsidiaries -210 0 0 608 398 Provisions made during the year 294 168 3 258 723 Provisions used during the year -141 -22 -33 -166 -362 Provisions reversed during the year -183 0 -8 -82 -273 Exchange adjustment 6 1 0 2 9 Discount rate adjustment / Unwind of discount 0 0 0 0 0 Balance as of 31 December 2005 583 241 5 853 1 682

Non-current 1 41 2 376 420 Current 1) 582 200 3 477 1 262 Balance as of 31 December 2005 583 241 5 853 1 682

2005 Amounts in NOK million Warranties Restructuring Legal claims Other Total

Balance as of 1 January 2005 722 145 50 262 1 179 Acquition and sale of subsidiaries 5 0 1 32 38 Provisions made during the year 419 30 -9 62 502 Provisions used during the year -162 -73 0 0 -235 Provisions reversed during the year -196 -6 0 -138 -340 Exchange adjustment 18 -2 1 15 32 Discount rate adjustment / Unwind of discount 11 0 0 0 11 Balance as of 31 December 2005 817 94 43 233 1 187

Non-current 3 90 40 172 305 Current1) 814 4 3 61 882 Balance as of 31 December 2005 817 94 43 233 1 187

1) See note 32 for shortterm obligations related to loss contracts.

Warranties The provision for warranties relates mainly to the possibility that Aker based on contractual agreements, needs to do guarantee work related to products and services delivered to customers. The provision is based on estimates about occurence and cost of work that needs to be done. The warranty period is normally two years and any cash effects will come in this period.

Restructuring Provision for restructuring in 2006 is related mainly to various provisions in Aker Kværner. Other provisions in 2006 is related mainly to various provisions in Aker Yards Finland. The yards in Turku Rauma and Helsinki was merged. The provision is related to possible future pension benefit obligation related to former employees, and in addition clean up provision related to shipyards in Finland. Both provisions are long-term.

Other Other provisions in 2006 relates mainly to early retirement in Aker Yards Germany NOK 91 million and provision for environmental clean-up of NOK 71 million. It also includes NOK 387 million in provision for contracts in process which were taken over as part of the acquisition of Aker Yards France.

NOTE 33: GUARANTEE OBLIGATIONS

At year-end 2006 Aker had guarantee obligations of NOK 1 319 million that were not recorded in the balance sheet.

As part of its ordinary operations, completion guarantees and guaranteed advance payments form customers are written. Such guarantees typically involve a financial institution that writes the guarantee vis-à-vis the customer.

Collateral has been posted for interest-bearing long-term debt of NOK 5,7 billion. The book value of assets used as collateral is NOK 7,6 billion.

86 Aker ASA Annual report 2006 Annual accounts Group

NOTE 34: TRADE AND OTHER PAYABLES

Trade and other payables comprise the following itmes: Amounts in NOK million 2006 2005

Advances from customers 11 930 8 413 Trade accounts payable 8 452 5 325 Accrual of operating- and financial costs 7 750 5 804 Other short-term interest free liabilites 3 158 2 458 Total 31 290 22 000

NET CURRENT OPERATING ASSETS / LIABILITIES (-)

Specification of net curent operating eiendeler (see also note 4): Amounts in NOK million 2006 2005

Inventories, Projects under constr., Other trade and other interest-free receivables 32 588 23 749 Trade and other payables -31 290 -22 000 Current provisions 1 301 -1 080 Total -3 669

NOTE 35: FINANCIAL INSTRUMENTS

The Aker Group consists of various operations and companies that are exposed to different kinds of financial risk including credit-, interest- and currency risk. The Group uses different financial instruments to active operate its financial exposure. The main companies in the Group have developed their own policies and guidelines on how the financial risk should be handled based on the individual companies exposure to the different kinds of financial risk.

Credit risk The management for the main companies has developed their own policies and guidelines for credit risk. The exposure to credit risk is monitored on an ongoing basis within the group guidelines. The group's prinicipal financial assets are bank balances and cash, trade and other receivables, finance lease receivables and investments, which represent the group's maximum exposure to credit risk in relation to financial assets. The group's credit risk is primarily attributable to its trade and finance lease receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables, estimated by the group's management based on prior experience and their asessment of the current eceonomic environment.Credit evaluations are performed on all customers requiring credit over a certain amount. Transactions involving derivative financial instruments are with counterparties with whom the Group has a signed netting agreement as well as sound credit ratings. Given their high credit ratings, management does not expect any counterparty to fail to meet its obligations. The maximum exposure to credit risk is represented by the carrying amount of each financial asset, including derivative financial instruments, in the balance sheet.

Interest rate risk The group’s interest rate risk arises from long-term borrowings. Aker has no significant intereset rate risk related to interest-bearing assets. Borrowings issued at variable rates expose the group to cash flow interest rate risk. Borrowings issued at fixed rates expose the group to fair value interest rate risk. The Group's exposure to interest risk is evaluated on an ongoing basis. Interest swap agreements are used to achieve a disired mix of fixed and floating interests.

Aker ASA Annual report 2006 87 Annual accounts Group

Overview of over maturity profile and time of repricing specified per main type of receivable and loan In respect of income-earning financial assets and interest-bearing financial liabilities, the following table indicates maturity profile and time of repricing specified per main type of receivable and loan.

2006 2005 6 mths 6-12 1-2 2-5 More than 6 mths 6-12 1-2 2-5 More than Amounts in NOK million Total and less mths years years 5 years Total and less mths years years 5 years

Interest-bearing long-term receivables 484 0 18 85 43 338 1 020 24 174 388 62 372 Interest-bearing short-term receivables 1) 3 247 3 085 162 - - - 832 813 19 - - - Cash and cash equivalents 14 987 14 987 - - - - 12 379 12 379 - - - - Secured bank loans -4 339 -2 402 - 18 - 124 - 290 -1 505 -3 620 - 35 - 93 - 111 - 567 -2 813 Unsecured bank loans - 445 - 280 - 12 - 87 - 27 - 39 - 307 - - - 277 - 30 - Secured bond issues -1 203 - - 250 - - 353 - 600 - 604 - - - 250 - 354 - Unsecured bond issues -4 935 - 801 - - 995 -2 207 - 932 -1 951 - 357 - - -1 094 - 500 Convertible loans/bonds 2) - 278 - - 278 - - - - 526 - - - - 526 - Finance lease liabilities - 77 - 10 - 10 - 20 - 32 - 5 - 85 - 7 - 8 - 17 - 38 - 15 Other long term liabilites 3) -2 065 - - 1 - 76 -1 454 - 534 -1 217 - 35 - 3 - 45 - 938 - 196 Bank facility - 118 - 51 - 67 - - - - 211 - 193 - 18 - - - Other short term liabilites - 339 - 295 - 44 - - - - 102 - 44 - 58 - - - Total 4 918 14 233 - 500 -1 217 -4 320 -3 277 5 608 12 544 13 - 312 -3 486 -3 152

Construction loans -4 795 -4 036 Net interest-bearing debt(-)/asset(+) 123 1 572

1) Including deposit to repay second priority lien notes in Aker Kværner of NOK 2 411 million. 2) 2006: 3,75% Aker Seafoods Holding AS Exchangeable Bond Issue 2005/2008. Bonds owners may at any time during the period from and including 20 September 2005 until and including 20 June 2008 exchange 1 bond (par value 100) to 12 500 ordinary shares in Aker Seafoods ASA. Total Exchange Asset is 7 250 000 shares (par value 5,-) 3) Including seller credit in connection with acquisition of subsidiaries.

Foreign currency exposure Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations. Below is a description of the foreign currency exposure per main company in Aker and a description of other types of risk that is typical of the individual companies.

Aker Kværner Foreign exchange risk

The group operates internationally and is exposed to foreign exchange risk arising from various currency exposures. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations.

Management have a policy that requires group companies to manage their foreign exchange risk against their functional currency. The group companies are required to hedge their entire foreign exchange risk exposure with the Group Treasury. To manage their foreign exchange risk arising from future commercial transactions and recognised assets and liabilities, entities in the group use forward contracts, and currency options, transacted with Group Treasury. Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the entity’s functional currency.

The Group Treasury’s risk management policy is to hedge 100 percent of anticipated cash flows from sales and purchases in different currency than the relevant entity’s functional currency for the project’s lifetime using forward contracts. Variations to forecasted cash flows are hedged immediately as they occur.

For segment reporting purposes, each subsidiary designates contracts with Group Treasury as fair value hedges or cash flow hedges, as appropriate. External foreign exchange contracts are designated at group level as hedges of foreign exchange risk on specific assets, liabilities or future transactions on gross basis, and hedge accounting is applied.

The group has several investments in foreign operations, whose net assets are exposed to foreign currency translation risk. Currency exposure arising from the net assets of the group’s foreign operations is not hedged, except from USD 85 million of net investments in US entities being hedged by foreign exchange swaps.

Derivative financial instruments 2006 2005 Amounts in NOK million Assets Liabilities Assets Liabilities Interest rate swaps - cash flow hedges 8 - - - Forward foreign exchange contracts - cash flow hedges 440 -151 - - Forward foreign exchange contracts/interest rate swaps - disqualifying hedges 364 -320 142 -354 Total 812 -471 142 -354

Trading derivatives are classified as current asset or liability. The full fair value of a hedging derivative is classified as a non-current asset or liability if the remaining maturity of the hedged item is more than 12 months, and as a current asset or liability if the maturity of the hedge item is less than 12 months. If the the hedged item is related to projects, such as work in progress or trade receivables, the hedging derivative is always classified as current asset or liability.

88 Aker ASA Annual report 2006 Annual accounts Group

The ineffective portion recognised in the income statement that arises from fair value hedges amounts to a gain of NOK zero million (2005: loss of NOK zero million). The ineffective portion recognised in the profit and loss that arises from cash flow hedges amounts to a gain of NOK 2 million (2005: loss of NOK zero million). The ineffectiveness that arised from net investment in foreign entity hedges was NOK zero million.

The maximum exposure to credit risk at the reporting date is the fair value of the derivative assets in the balance sheet.

Forward foreign exchange contracts The notional pincipal amounts of the net qyalifying forward foreign exchange hedges at 31 December 2006 were NOK 289 million (2005: NOK zero million). The hedged highly probable forecast transactions denominated in foreign currency are expected to occur at various dates during the next 1-7 years. Gains and losses recognised in the hedging reserve in equity on forward foreign exchange contracts as of 31 December 2006 are recognised in the income statement in the period or periods during which the hedged transactions affects the income statement. This is generally within 12 months from the balance sheet date unless the gain or loss is over the lifetime of the asset.

The following table indicates the periods in which the cash flows associated with derivatives that are cash flow hedges are expected to occur:

Expected 6 mths More than Amounts in NOK million cash flows or less 6-12 mths 1-2 years 2-5 years 5 years Interest rate swaps 1) Receivables 142 16 16 64 43 3 Payables -132 -15 -15 -59 -40 -3 Forward exchange contract 2) Receivables 10 617 3 411 1 581 5 591 34 - Payables -4 056 -1 596 -1 128 -1 332 - - Total 3) 6 571 1 816 454 4 264 37 -

1) Half of the group's interest exposure related to the Norwegian bonds is swapped to fixed interest rate. The cash flows in the table are based on the 1 December 2006 fixing of 3.67 percent. 2) The figures include the hedges that qualify for hedge accounting, which comprises less than 400 transactions and 80-90 percent of the group's exposure. The amounts are nominal values of cash flows at closing exchange rates 31. December 2006. The group do have economic hedges on the remaining disqualifying part, these hedges consitutes about 1 400 transactions. 3) Figures for 2005 is 0 since group did not have hedge accounting.

The following table shows the cash flow hedges' impact on profit or loss and equity as at 31 December 2006:

Fair value of all hedging Deferred in equity Beløp i millioner kroner instruments as at 31.12.2006 Recognised in profit and loss (the hedging reserve)

Interest rate swaps 1) 8 - 8 Forward exchange contracts 2) 289 118 171 Total 3) 297 118 179

1) The value of the interest swaps is attributable to changes in the interest swap curve for Norwegian kroner during the period from inception of the hedge on 1 December 2006 to year-end. Based on an assumption of unchanged interest swap curves after 1 January 2007, this value will come to Income statement during the next seven years. 2) The purpose of the hedging instrument is to secure a situation where the hedged item and the hedging instrument together represent a predetermined value independant of fluctuations of exchange rates. Revenue and expense on the underlying construction contracts are recognised in the Income statement in accordance to progress. Consequently, NOK 118 million of the value of the foreward contracts have already affected Income statement indirectly as revenues and expenses are recognised based on updated forecasts and progress. The NOK 171 million that are currently recorded directly in the hedging reserve, would come to Income statement over the next approximately three years, in accordance to future progress on the same construction contracts. 3) Figures for 2005 is 0 since group did not have hedge accounting.

Interest rate swaps The notional amounts of the outstanding interest rate swap contracts at 31 December 2006 were NOK 8 million. As per 31 December 2006 Aker Kværner has one Bond of NOK 150 million with fixed interest rates (2006: six percent). The main floating rates are NIBOR and LIBOR. Gains and losses recognised in the hedging reserve in equity on interest rate swap contracts as of 31 December 2006 will be continously released to the income statement until the repayment of the bank borrowings.

Hedge of net investments in foreign entity Swaps have been purchased to hedge USD 85 million of the net investment in the group's US entities. The fair value of the bonds at 31 December 2006 was NOK 7 million. The foreign exchange gain of NOK 7 million on translation of the borrowing to NOK at the balance sheet date is recognised in translation reserves, in shareholder's equity.

Denomination of trade and other receivables in various currencies Group Treasury is hedging future transactions in foreign currencies. Due to a large number of transactions, treasury may bundle the contracts before they are being hedged. However, the hedge accounting requirements implies that all transactions in foreign currencies should be hedged as one to one contract, which would demand large additional resources due to high volume of such contracts. Approximately 85 percent of the exposure to foreign exchange variations in future cash flow is related to a few large projects. These projects have been hedged as one to one contracts in 2006 in order to meet the requirements for hedge accounting. All other hedges are designated as disqualifying hedges and will have a volatile effect on income statement. As per 31 December 2006 the order backlog was of NOK 59.7 billion, of which NOK 8.8 billion qualify for cash flow hedge accounting and NOK 2.5 billion is hedged, but is disqualified for hedge accounting. This means that NOK 48.4 billion (81percent) is highly probable future revenues in the same currency as the relevant entity's functional currency and therefore does not need to be hedged for currency fluctuations.

Aker ASA Annual report 2006 89 Annual accounts Group

The NOK 2.5 billion which is hedged, but disqualified for hedge accounting, is all in USD (amounts to USD 350 million). USD 200 million is hedged against NOK and the rest is hedged agains various other currencies. An increase / decrease of 0.50 USD against NOK would result in a gain/loss to the financial items in the income statement of NOK 100 million over a period of approximately one to three years. The total hedge (economic and accounting wise) of NOK 11.3 billion mostly refers to future payments from customers of which only a very small portion is already recognisedin the balance sheet. Approximately 96 percent of the 11.3 billion are hedges against USD, which is the far mostly used currency in Aker Kvaerner besides NOK.

Aker Yards Foreign exchange risk The Group have a rigid policy of hedging of currency risks. When contract price is normally entered into in local currencies, and the costs of the project is in large extend in local currency, the currency exposure of the projects is relatively small. Any possible net exposure in singel currencies are hedged when a contract is entered into.

As of December 31, 2006 the Aker Yards Group's portofolio of other foreign exchange derivatives represented the following currencies and maturities. Amounts indicated include underlying principal.

Amounts in NOK million 2007 2008 2009 Total Sell EUR 4 2 1 6 Sell USD 834 598 1 054 2 486 Sell total 838 600 1 055 2 492

Buy EUR 1 273 1 122 203 2 598 Buy USD 425 205 - 631 Buy total 1 699 1 327 203 3 229

Hedging of construction contracts When hedging the value of a construction contract or cost related to a contract in foreign currency, the part of hedging related to the percentage of completion in the contract adjust the value of work in progress. The value related to unrecognized contractual commitment (firm commitment) is accounted for as short term interest bearing receivables or liabilities. Net value of firm commitment recognized in the balance sheet at 31 December 2006 is NOK -115 million (2005: NOK 62 million). The construction contracts or hedged related costs are recognized to hedged currency rate under assumptions that it is a perfect hedge relationship. This are treated as fair value hedging. The total portefolio of foreign exchange derivatives is used to hedge construction contracts.

Aker American Shipping Foreign exchange risk The Group incurs foreign currency risk on sales, purchases and borrowings that are denominated in a currency other than USD. The currencies giving rise to this risk are primarily EUR, NOK and KRW. As of 31 December 2006 the company has entered into 10 interest swap arrangements. The swap contracts exchange variable interest for fixed interest of USD 660 million of an estimated USD 700 million borrowing need for the 10 product tankers the group will build and operate. The company has as of December 31, 2006 an undrawn borrowing facility of USD350 million with DnB Nor. The purpose of the facility is the financing of the first five product tankers. The variable interest rate under this arrangement is Libor plus 0.7 percent.

Aker Seafoods Foreign exchange risk The Group incurs foreign currency risk on sales, purchasees and borrowings that are denominated in a currency other than NOK. The currencies giving rise to this risk are primarily euro, SEK, GBP and USD. Roughly 50% of all receivables in EUR and GBP are hedged. Roughly 50% of the foreign-exchange risk is associated with anticipated sales. The subsequent six months are also hedged at all times. Forward foreign exchange contracts are used for hedging the foreign-exchange risk. All forward foreign exchange contracts expire less than one year after the balance sheet date. The Group ensures that the net exposure linked to other monetary assets and liabilities in foreign currency is kept at an acceptable level by buying and selling foreign currency at the current rate of exchange when it is necessary to manage a short-term imbalance. Aker Seafoods’ portfolio of currency derivatives at 31 December 2006, which hedges against future sales, consists of the following currencies and times of maturity. The amounts indicate the underlying principal.

Later Amounts in NOK million 2007 Years Total Sell EUR 191 0 191 Sell GBP 33 0 33 Sell total 223 0 223 Buy EUR 000 Buy GBP 000 Buy total 000 Net position 223 0 223

90 Aker ASA Annual report 2006 Annual accounts Group

Aker Material Handling Foreign exchange risk The Aker Material Handling Group operations are exposed to foreign currency risk. The main currencies involved are EURO, NOK and SEK. By the time of closing of larger contracts in local currency the exchange rate risk is to be secured through a hedge; selling or buying the relevant currency at a future date. At the end of 2006 the group had no significant contracts with currency risk exposure.

Other companies Foreign exchange risk Aker BioMarine incurs foreign currency risk on sales, purchasees and borrowings that are denominated in a currency other than NOK. The currencies giving rise to this risk are primarily JPY and USD. Aker BioMarines’ portfolio of currency derivatives at 31 December 2006, which hedges against future sales, consists mainly of purchase of JPY 1,8 billion. Fair value is USD 15,6 million.

Fair value estimations

The fair value of financial instruments traded in active markets (such as currency forward contracts and options, interest swaps and FRA’s) is based on quoted market prices at the balance sheet date.

Due to the short-term nature, the carrying amount is a reasonable approximation of fair value for cash and cash equivalents, available-for-sale financial assets, financial assets at fair value through profit and loss and for loans and receivables, with the exception of non-current borrowings, which is detailed in the table below.

The fair values together with the carrying amounts shown in the balance sheet are as follows: 2006 Carrying amount Fair value Amounts in NOK million Bonds 1) 6 416 6 824 Other borrowings 3 370 3 370 Total Borrowings 9 786 9 894

1) Fair value are quoted prices on the Oslo Stock exchange.

The difference between the carrying amount and the fair value of the bonds is due to amortisation of issuance fees and accrued interests.

NOTE 36: CONTINGENCIES AND LEGAL CLAIMS

LEGAL CLAIMS Project risks and uncertainties The group’s operations are to a large extent subject to long term contracts, some of which are fixed-price, turn key contracts that are awarded on a competitive bidding basis. Failure to meet schedule or performance guarantees or increases in contract costs can result in non-recoverable costs, which could exceed revenues realised from the applicable project. Where a project is identified as loss making, forward loss provisions are made. The accounting treatment is based on the information and advice available. Inevitably, such circumstances and information may be subject to change in subsequent periods and thus the eventual outcome may be better or worse than the assessments made in preparing up periodical financial reports.

Legal proceedings With its extensive worldwide operations, companies included in the group are in the course of their activities involved in legal disputes. Provisions have been made to cover the expected outcome of the disputes to the extent negative outcomes are likely and reliable estimates can be made. How- ever, the final outcome of these cases will always be subject to uncertainties and resulting liabilities may exceed booked provisions.

Holborn In 2000, Aker Kvaerner Netherlands B.V. and Holborn Europa Raffinererie GmbH entered into contracts for delivery of a steam reformer and a unit for removal of sulphur and conversion of aromatics in refinery streams in order to produce ultra low sulphur and low aromatics diesel in accordance with the EU Fuel Directives. Aker Kvaerner Netherlands B.V has initiated legal proceedings against Holborn Europa Raffinererie GmbH claiming payment of outstanding invoices of approximately EUR 9.2 million and reimbursement of amounts drawn on bank guarantees of approximately EUR 7 million. Holborn Europa Raffinererie GmbH has rejected the claim and raised counter claims of approximately EUR 34 million based on alleged defects, delays and acts of serious negligence and/or wilful misconduct in the execution of the project. Aker Kvaerner Netherlands B.V has rejected the counter claims from Hol- born Europa Raffinererie GmbH. The courts have encouraged the parties to try to reach a commercial settlement in which Holborn is paid EUR 10 million. However, no such settlement has been obtained. Although there can be no assurance regarding the outcome, the expectation is that this will not have a material negative impact on the financial position or operational result.

Aker ASA Annual report 2006 91 Annual accounts Group

Warnow In 2004 the European Commission opened formal proceedings to examine whether Kvaerner Warnow Werft, now renamed Aker Warnow Werft, a subsidiary within the Aker Group, received approximately EURO 61 million (plus interest) in excess subsidies from German authorities in connection with the privatizations of the shipyard in 1992 and, if so, to what extent could be required to repay any such subsidies. On 29.10.2004 the Commission declared that approximately EURO 26,5 million (including interest as of May 2005) of the state aid given to the yard was incompatible with the Com- mon Market and instructed Germany to institute all measures to reclaim this amount. Kværner is of the opinion that all subsidies granted were utilized in accordance with provisions duly notified to and approved by the European Commission and thus that no repayment obligation can be justified. Aker Warnow Werft have received a claim of repayment and after the reorganizing of the Yards in Germany it has been agreed that it is Kværners (Aker Maritime Finance after the merger at the end of 2005) sole financial responsibility. The company has provided guarantees for the claim in 2006.

TAX Aker ASA and its subsidiaries have pending issues that ar under assessment by local tax authorities in certain countries in which the Group has operations. In accordance with generally accepted accounting practices, Aker has treated issues pending final determination in accordance with the information available at the end of the accounting period.

NOTE 37: TRANSACTIONS AND AGREEMENTS WITH RELATED PARTIES

Aker ASA's main shareholder is TRG Holding AS which is controlled by Kjell Inge Røkke. All companies controlled by Kjell Inge Røkke is considered as related parties for the Aker Group. According to relevant accounting principles information should be given regarding transactions, free transfers and agreements with related parties when such information can be significant for the user of the accounts when evaluating the Group.

Aker does not have any material outstanding accounts neither has there been any transactions during 2006 with Kjell Inge Røkke except director's fee and other emoluments as described in note 38.

Associated companies: Aker BioMarine ASA, a subsidiary of Aker ASA, have at end of December 2006 NOK 328 million (2005 NOK 283 million) in interest-bearing receivable against the associated company p/f Næraberg. The changes in the receivable during 2006, consist of a write down of NOK 163 million and new loans to finance new ships. In January 2007 Aker Kvaerner acquired 56 percent of the shares in the yard OAO "Astrakhan Korabel" from RR Offshore OY in which Aker Kvaerner controls 26 percent of the shares. The purchase price was EUR 3.8 million. Aker Drilling ASA ,owned 30,8% by Aker ASA, and Aker Kvaerner signed in 2005 a contract for the turn-key delivery of two sixth-generation deepwater drilling semi-submersibles with an option for another two rigs by 2010. The contract value was originally approximately NOK 7.6 billion. In 2006 Aker Kvaerner was awarded a NOK 0.2 billion contract for delivery of advanced mooring systems to the two rigs. The two drilling rigs are scheduled for delivery in April and October 2008. In October Aker Drilling decided not to exercise options that expired on 30 September.

Aker ASA has provided a bankguarantee on behalf of p/f Næraberg of NOK 185 million.

In addition to the above Aker charged assosiated companies and other related parties for rent and other administration services of NOK 4 million.

Note 38 REMUNERATION PAID TO THE PRESIDENT & CEO AND GROUP MANAGEMENT

Remuneration to the Board of Directors Remuneration paid to the board of directors in 2006 is NOK 2 550 000. The members of the board, with exception of the chairman (see below), did not receive any other remuneration in 2006. The Chairman of the board (Leif-Arne Langøy) employee of Aker ASA, has not received any board remuneration from Aker ASA. In 2006 Leif-Arne Langøy did receive a salary of NOK 4 056 000. In addition he received a bonus of NOK 2 639 000 and other compensation of NOK 420 000. Net pension expenses for Leif-Arne Langøy is NOK 128 545.

The appointment of Leif-Arne Langøy could be terminated with 6 months notice. If the company terminate the contracts, Leif-Arne Langøy is entitled to 6 months salary from the date of termination. The salary will not be paid if he continues in an appointment in another company within the Aker Group. The remuneration plan for Leif-Arne Langøy includes a fixed salary, standard pension- and insurance plan for employees and a variable salary. The variable salary for Leif-Arne Langøy represents a potentially additional salary of up to 100% of the fixed salary.

92 Aker ASA Annual report 2006 Annual accounts Group

Remuneration to the Board of Directors:

Amount in NOK Kjell Inge Røkke (chairman of the board until 30.3.06) 250 000 Leif-Arne Langøy (chairman of the board from 30.3.06) - Lone Fønss Schrøder 350 000 Bjørn Flatgård 300 000 Jon Fredrik Baksaas 300 000 Kjeld Rimberg 300 000 Kjell A. Storeide 300 000 Hanne Harlem (from 01.04.06) 150 000 Atle Tranøy (employee representative) 150 000 Harald Magne Bjørnsen (employee representative) 150 000 Bjarne Kristiansen (employee representative) 150 000 Stein Aamdal (employee representative) 150 000 Sum 2 550 000

Directive of remuneration to the Group President and the Group Leadership The systems for the leadership remuneration main purpose is to stimulate to a strong and lasting profit oriented culture which contribute to an increasing value of the stocks. The accumulated remuneration to the leadership consists of marked based fixed salary, some few standard remuneration in addition and a variable salary.

The Managing Director and the Group Leadership are members in a collective pension and insurance plan which applies to all the employees. The company practise standard employee hire contracts and conditions regarding notice terms and terminate pay for the Group President and the leadership. The company do not offer share option programs to the employees.

The program for the variable salary shall contribute to achievement of good financial profit and leadership according to the company’s values and business ethic.

The variable salary is based on achievement of financial and personal targets, leadership according to the company’s values and development of the companies share value. The program represents a potential for the leadership to achieve a variable salary up to 60% of the fixed salary. Achieved variable salary is paid over 3 years. Half of the achieved variable salary is paid the following year. The remaining amount is paid two years later together with a raise if the leader is still employed by the company. The yearly payments are limited to one year fixed salary and the limitation will be effective the two following years.

Remuneration to the Managing Director Managing Director Bengt A. Rem has received a fixed salary of NOK 1 749 000 and a bonus/variable salary of NOK 7 788 000 in 2006 (whereof NOK 5 250 000 is related to projects). The value of additional remuneration is NOK 179 000 and net pension expenses for Bengt A. Rem is NOK 112 000.

Remuneration to the Group Leadership The Group Leaderships appointment can be terminated with a six months notice. If the company terminates the appointment, the Group Leadership has a right to six months salary after termination. The Group Leadership has a bonus plan based on achievement of defined short-term and long-term results (See description below). The Norwegian Group Leaders is included in the company’s collective pension plan for salary up to 12 G. Excecutive Vice President Geir Arne Drangeid has received a fixed salary of NOK 1 652 000 and a bonus/variable salary of NOK 1 589 000 in 2006. The value of additional remuneration is NOK 179 000 and net pension expenses for Geir Arne Drangeid is NOK 106 000.

Martinus Brandal was Excecutive Vice President in Aker ASA until 30 June 2006, there upon he took over as President and CEO of Aker Kværner ASA. In the period he was Excecutive Vice President in Aker ASA he received a fixed salary of NOK 1 154 000 and a bonus/variable salary of NOK 9 128 000 in 2006 (whereof NOK 7 000 000 related to projects). The value of additional remuneration is NOK 257 000 and net pension expenses for Martinus Brandal is NOK 117 000.

The remuneration plan for Managing Director and other Group Leadership members includes a fixed yearly salary, standard pension- and insurance plan for the employees and variable salary.

The variable pay programme is based on the achievement of financial and personal performance targets, leadership performance in accordance with the company’s values and the development of the company’s share price. The programme represents a potential for an additional variable pay up to the value of 60 percent of base salary. Earning is paid over three years. The first half of the variable pay is paid the following year. The remaining amount is paid two years later, with the addition of an retention element, provided the executive is still employed by the company. A restriction is introduced for future payments from this programme. The annual payments are restricted to one annual base salary and the restriction will be fully effective after the next two years.

The appointments of other leaders can be terminated with six months notice. If the company terminate the appointment, the leader is entitled to six months salary after termination. The Group Leadership in Norway has a de-escalation agreement from the age of 60 years old with gradually reduction of salary and working hours until 67 years old.

Aker ASA Annual report 2006 93 Annual accounts Group

NOTE 39: SHARES OWNED BY THE PRESIDENT & CEO, BOARD OF DIRECTORS AND GROUP MANAGEMENT IN AKER ASA

Shares owned or controlled by members of the Board of Directors and Executive Team (and their related parties) as of 14 February 2007: The following number of shares are owned by Board members and Group management and their related in Aker ASA and other listed subsidiaries at 31. December 2006.

Aker American Aker Floating Aker ASA Aker Kværner Aker Yards Aker Seafoods Shipping Production Leif-Arne Langøy (Chairman of the Board) 1) 31 000 15 000 20 000 38 400 23 000 13 000 Lone Fønss Schrøder 1 173 Bjørn Flatgård 1 107 683 Jon Fredrik Baksaas Kjeld Rimberg 10 300 Kjell A. Storeide Hanne Harlem Atle Tranøy (employee representative) Harald Magne Bjørnsen (emplyee representative) 700 454 Bjarne Kristiansen (employee representative) Stein Aamdal (employee representative)

Group management Bengt A. Rem 10 000 8 000 5 000 Geir Arne Drangeid

1) Also owns 133 333 B-shares (0,26%) in TRG Holding AS, who owns 66,66% in Aker ASA.

The Group President and Group Leadership have no loans or stock options.

In connection wtih the merger with Aker RGI Management AS, Aker ASA acquired all of the outstanding shares in Aker RGI Management AS in 2004. The purchase agreement includes a contingent fee, linked to the value of Aker ASA, which where fullfiled in 2005 and NOK 54 million was paid to the former shareholders of Aker RGI Managment in 2006.

NOTE 40 SUBSEQUENT EVENTS

In the fourth quarter of 2006, share issues were carried out in Aker's newly established companies Aker BioMarine and Aker Exploration. The development of both companies continues; the goal is to get them quoted on the stock exchange in the first half of 2007.

In January 2007, Aker sold shares, reducing its ownership interests in both Aker Kværner and Aker Yards to 40.1 percent. The share divestiture freed up NOK 4.7 billlion in cash.

NOTE 41: GOVERNMENT GRANTS

In 2006, the Aker Yards Group received funds from public institutions related to research and development and Yards subsidiaries.

Grants received relates to the following activities: Amount in NOK million 2006 2005 2004

Research and development 55 21 11 Subsidiaries to yards 85 173 191 Other 3 12 9 Total 143 206 211

94 Aker ASA Annual report 2006 Annual accounts Group

Aker American Shipping Aker Philadelphia Shipyard has been funded by various federal, state, and local government agency subsidies totaling USD 438,6 million as set forth in the Master Agreement between the Government Parties and the Company, dated December 16, 1997, as amended July 30, 1999.

Funding under the Master Agreement was allocated as follows: USD 42 million for preliminary Shipyard development, USD 259,6 million for initial construction costs, and USD 137 million for employee training programs. The company was in 2001 granted a transfer of USD 50 million from the preliminary Shipyard development budget to the initial construction costs budget, but the overall amount of USD 438,6 million will not change. Funding is being provided through loans to the company as well as grants.

The company has exhausted the funding under the preliminary Shipyard development costs and the initial constructions costs, and therefore did not receive any related reimbursements in 2006.

For the years ended December 31, 2006, the company received USD 2,1 million of reimbursed employee training costs. Cumulative, through December 31, 2006, the company has received USD 134,1 million of the amounts available for training costs incurred through December 31, 2006.

Other commitments and contingencies In addition to the construction costs that were funded by the financing under the Master Agreement, the company was obligated to make USD135 million of additional capital investments through December 2014. The company has received confirmation from PSDC that the entire obligation has been met during first half of 2006.

Under the terms of the Master Agreement, the company, and former Kvaerner ASA are subject to various operating covenants, restrictions, and obligations throughout and approximately 15-years period. The company anticipates that it will continue to comply with the terms and requirements of the Master Agreement and that the Master Agreement will continue to remain in effect.

During 2001, the company received USD 50 million from the PSDC for construction costs, which was originally stipulated as funding for training costs. As a result, the company agreed to match government funding for training costs commencing on April 1, 2002, until all of the remaining training funding was utilized. The utilization of the remaining training funding has occur through 2006.

In addition, under the Master agreement, the company is required to pay a common area maintenance charge each month to the PSDC of approximately $30,250 through the term of the agreement.

On September 13, 2002, the company finalized an agreement with the City of Philadelphia (and others), whereby the Real Estate and Use and Occupancy Tax for the years 2001 through 2017 were agreed to. The company is committed to a fixed assessment of approximately USD 3,3 million to USD 3,6 million per year, commencing in 2003.

Aker ASA Annual report 2006 95 Annual accounts Aker ASA

ACCOUNTS AKER ASA Profit and Loss Account

Amounts in NOK million Note 2006 2005 13.02-31.12.04

Total revenues - - -

Wages and other personnel expenses 1,20 -64 -61 -39 Depreciations 4 -5 -7 -5 Other expenses 2 -47 -28 -51 Sales gain/loss fixed assets 3 - 2- Operating profit -116 -94 -95

Dividends from subsidiaries 360 14 66 Dividends other companies - 4- Received Group contribution 4 - 380 Interest income from Group companies 402 101 23 Gain on sale of shares 840 2 343 - Other interest and financial income 220 64 95 Interest expenses to Group companies 11 -275 -225 -134 Writedowns shares and receivables 15 -249 -4 -29 Other interest and financial expenses 14 -191 -221 -152 Profit after financial items 995 1 982 154

Tax on ordinary profit 9 57 45 -93 Tax regarding limited deferred tax benfit in the balance sheet 9 - - -509 Profit/loss for the year 1 052 2 027 -448

ALLOCATION OF PROFIT/LOSS FOR THE YEAR

Profit/loss for the year 1 052 2 027 -448 Dividends 11 -2 181 -746 - Transferred from/allocated to (-) retained earnings 1 129 -1 281 448 Total 8 - - -

Received group contribution from subsidiaries against investments before tax 203 2 092 - Group contribution without tax effects to subsidiaries - -519 - Group contribution after tax to subsidiaries - - -

96 Aker ASA Annual report 2006 Annual accounts Aker ASA

ACCOUNTS AKER ASA Balance sheet as of 31. December

Amounts in NOK million Note 2006 2005 2004

ASSETS Goodwill 4 95 95 58 Deferred tax benefit 9 - - 494 Total intangible assets 95 95 552 Art, inventory and vehicles 39 42 44 Property 3 3 3 Total tangible fixed assets 4 42 45 47 Shares in subsidiaries 5,15 12 831 12 363 13 316 Other long-term investments in shares etc. 13 10 363 Long- term receivables from Group companies 6,15 9 903 7 720 605 Other long-term investments 6,10 190 16 121 Total financial fixed assets 22 937 20 109 14 405 Total fixed assets 23 074 20 249 15 004 Short-term receivables on Group companies 42 38 236 Group contributions 208 2 092 586 Other short-term receivables 14 27 15 62 Other short-term investments 7 - 50 - Bank deposits, cash in hand, etc 17 522 928 185 Total current assets 799 3 123 1 069 Total assets 23 873 23 372 16 073

EQUITY AND LIABILITIES Share capital 3 214 3 214 2 423 Purchased shares - - -185 Share premium reserves 2 071 2 071 2 334 Other paid in equity 3 236 3 236 3 235 Total paid in equity 8 521 8 521 7 807 Other equity 3 531 4 661 - Total retained earnings 3 531 4 661 - Total equity 8,19 12 052 13 182 7 807 Pension liability 10 101 105 127 Total provisions 101 105 127 Long-term debt to Group companies 11,16 1 770 1 708 1 160 Long- term subordinatet debt to Group companies 11,16 4 835 4 848 4 694 Other long-term debt 11 2 800 1 453 1 891 Total other long-term debt 9 405 8 009 7 745 Short-term debt to Group companies 11 864 1 525 357 Other short-term debt 11 1 451 551 37 Total short-term debt 2 315 2 076 394 Total equity and debt 23 873 23 372 16 073

Oslo, 28 February 2007 Board of Directors Aker ASA

Leif-Arne Langøy (Sign.) Lone Fønss Schrøder (Sign.) Bjørn Flatgård (Sign.) Jon Fredrik Baksaas (Sign.) (Board Chairman) (Deputy Chairman) (Director) (Director)

Kjeld Rimberg (Sign.) Kjell A. Storeide (Sign.) Atle Tranøy (Sign.) Hanne Harlem (Sign.) (Director) (Director) (Director) (Director)

Bjarne E. Kristiansen (Sign.) Harald Magne Bjørnsen (Sign.) Stein Aamdal (Sign.) Bengt A. Rem (Sign.) (Director) (Director) (Director) (Managing Director)

Aker ASA Annual report 2006 97 Annual accounts Aker ASA

ACCOUNTS AKER ASA Cash flow statement

Amounts in NOK million Note 2006 2005 13.02-31.12.04

Profit after financial items 995 1 982 154 Gain/(loss) of sales fixed assets and write downs -604 -2 285 29 Unrealized foreign exchange loss/gain (-) -10 43 23 Ordinary depreciation 4 5 7 5 Change in short-term items etc -545 1 613 -167 Cash flow from operating activities -159 1 360 44

Investments in tangible fixed assets 4 0 - -10 Payments for acquisitions of shares and other equity investments 5 -36 -152 -2 738 Payments for long-term interest bearing receivable 6 -1 018 - - Proceeds from sales of tangible fixed assets 4 - 2 - Proceeds from sales of shares and other equity investments 5 3 1 499 - Other investments/disposals etc 6 281 -289 - Cash flow from investments activities -770 1 060 -2 748

Paid in cash - 2 737 New long-term interest-bearing debt 11 1 451 1 533 2 751 Repayment of long-term interest-bearing debt 11 -351 -1 580 -491 Change in short-term interest-bearing debt 7,11 -101 -89 -2 095 Dividend and Group contributions paid/received 8 -476 -1 541 -13 Cash flow from financing activities 523 -1 677 2 889

Cash flow for the year -406 743 185 Bank deposits, cash in hands etc in the beginning of the period 928 185 - Bank deposits, cash at hands etc in the end of the period 522 928 185

98 Aker ASA Annual report 2006 Annual accounts Aker ASA

ACCOUNTS AKER ASA Accounting Principles

The annual report is prepared according to the Foreign currency translation period and changes in deferred tax. Deferred Norwegian Accounting Act 1998 and generally Foreign currency transactions are translated tax is calculated at 28 percent on the basis of accepted accounting principles in Norway. using the year end exchange rates. existing temporary differences between accounting profit and taxable profit together Short term investments with tax deductible deficits at year end. Tem- Subsidiaries and investment in associate Short term investments (stocks, short-term porary differences, both positive and negative, Subsidiaries and investments in associate are bonds, liquid placements and shares are are balanced out within the same period. valued by the cost method in the company valued as current assets) are valued at the Deferred tax assets are recorded in the accounts. The investment is valued as cost of lower of acquisition cost and fair value at the balance sheet to the extent it is more likely acquiring shares in the subsidiary, providing balance sheet date. Dividends and other distri- than not that the tax assets will be utilized. that write down is not required. Write down to butions are recognized as other investment fair value will be carried out if the reduction in income. value is caused by circumstances which may Cash flow statement not be regarded as incidental, and deemed Property, plant and equipment The cash flow statement is presented using the necessary by generally accepted accounting Property, plant and equipment is capitalized indirect method. Cash and cash equivalents principles. Write downs are reversed when the and depreciated over the estimated useful includes cash, bank deposits and other short cause of the initial write down are no longer economic life. Direct maintenance costs are term higly liquid placement with original matur- present. expensed as incurred, whereas improvements ities of three months or less. and upgrading are assigned to the acquisition Dividends and other distributions are cost and depreciated along with the asset. If recognized in the same year as appropriated carrying value of a non current asset exceeds Use of estimates in the subsidiary accounts. If dividends the estimated recoverable amount, the asset is The preparation of the financial statements exceed withheld profits after acquisition, the written down to the recoverable amount. The requires management to make estimates and exceeding amount represents reimbursement recoverable amount is the greater of the net assumptions that affect the reported amounts of invested capital, and the distribution will be selling price and value in use. In assessing in the profit and loss statement,the measure- subtracted from the value of the acquisition in value in use, the esimated future cash flows ment of assets and liabilites and the disclosre the balance sheet. are discounted to their present value. of contigent assest and liablilities on the balanse sheet date. Actual results can differ Pensions from these estimates. Balance sheet classification Pension costs and pension liabilities are esti- Net current assets comprise creditors due wit- mated on the basis of linear earnings and Contingent losses that are probable and hin one year, and entries related to goods future salary. The calculation is based on quantifiable is expenced as occured. circulation. Other entries are classified as fixed assumptions of discount rate, future wage assets and/or long term creditors. adjustments, pension and other payments from the national insurance fund, future return on Current assets are valued at the lower of pension funds and actuarial assumptions for acquisition cost and fair value. Short term deaths, voluntary resignation etc. Pension creditors are recognized at nominal value. funds are valued at fair value and deducted from net pension liabilities in the balance Fixed assets are valued by the cost of acquisi- sheet. Changes in the pension obligations due tion, in the case of non incidental reduction in to changes in pension plans are recognized value the asset will be written down to the fair over the estimated average remaining service value amount. Long term creditors are period. When the accumulated effect of recognized at nominal value. changes in estimates, changes in assumptions and deviations from actuarial assumptions The bond loans with fixed interest are recorded exceed 10 percent of the higher of pension according to amortized cost. obligations and pension plan assets, the excess amount is recognized over the esti- Trade and other receivables mated average remaining service period. Trade receivables and other current receivables are recorded in the balance sheet Income tax at nominal value less provisions for doubtful Tax expenses in the profit and loss account debts. comprise both tax payable for the accounting

Aker ASA Annual report 2006 99 Annual accounts Aker ASA

ACCOUNTS AKER ASA Notes

During the year Aker Contracting FP AS has been used as a contribution in kind in the subsidiary Aker Floating Production ASA. Aker Floating Pro- duction has also done a share issued. The company are using the increased capital to buy ships and rebuild them to FPSO ships. A gain of 767 NOK mill is included in gain on shares.

NOTE 1: WAGES AND OTHER PERSONNEL EXPENSES Wages and other personnel expenses consist of the following:

Amounts in NOK 1 000 2006 2005 2004 Wages and salaries 42 35 23 Social security 13 8 5 Pension cost 8 6 -6 Other benefits 1 12 17 Total 64 61 39 Average number of employees 39 35 26

NOTE 2: AUDITOR'S FEE

Auditor's fee is included in other expenses and consists of the following:

Orinary Other Law Total Total Total Amounts in NOK million auditing Attestation services services 2006 2005 2004 Aker ASA 2 1 3 3 5

NOTE 3: SALES GAIN/(PROFIT) OF TANGIBLE FIXED ASSETS

Amounts in NOK million 2006 2005 2004 Sale property - 2 - Total - 2 -

NOTE 4: FIXED ASSETS The change in fixed assets consists of the following:

Amounts in NOK million Art Machines/ cars/ inventory Buildings etc Total Goodwill Cost as of 1 Jan. 23 81 8 112 96 Purchase 4 4 Sold Cost as of 31 Dec. 23 85 8 116 96 Accumulated depreciations -69 -5 -74 -1 Book value as of 31 Dec. 23 16 3 42 95 Ordinary depreciations for the year -5 -5

Life time 4-8 years Plan of depreciations Linear

Goodwill arised from the merger with Aker RGI Management AS. Purchase of a company are among other items based on strategic adaptation and expected future economic profit.

100 Aker ASA Annual report 2006 Annual accounts Aker ASA

NOTE 5: SHARES Shares in subsidiaries consist of the following as of 31 Dec: Equity as of Profit after Amounts in NOK million Ownership in % 1) Head quarters 31 Dec financial items Book value

Aker AS 100,00 Oslo - - 3) - Recondo AS 100,00 Oslo 141 - 3) 139 Norway Seafoods Holding AS 92,40 Oslo 766 -11 3) 762 Aker Yards ASA 50,40 Oslo 6 082 1 227 2),5) 2 009 Atlas-Stord AS 100,00 Bergen 74 3 3) 84 RGI (Europe) BV 100,00 Rotterdam 3 002 214 3) 1 666 Norcrest Finance Corp 100,00 Liberia -16 - 3) - CS Krabbe AS 100,00 Oslo 49 1 3) 47 Aker Reassurance AS 100,00 Copenhagen 6 - 3) 5 Resource Group International AS 100,00 Oslo 34 -1 3) 33 Aker Mekaniske Verksted AS 100,00 Oslo 80 10 3) 65 Intellectual Property Holdings AS 100,00 Oslo - - 3) - Aker Maritime Finance AS 100,00 Oslo 1 958 - 3) 1 786 Aker Geo Seismic AS 100,00 Oslo 324 11 3) 314 Aker Finans AS 85,00 Oslo 1 - 3) 8 Aker Kværner ASA 50,01 Oslo 7 983 1 669 2),5) 3 523 Aker Capital AS 100,00 Oslo 1 852 377 3) 1 456 RGI Inc 1,25 Seattle 1 065 195 3), 4) 14 Aker Bravo AS 10,00 Oslo 13 2 3), 4) 2 Molde Fotball AS 100,00 Molde 24 -6 3) 25 Aker Floating Production ASA 50,10 Oslo 1 704 -11 2) 890 K3 Komplementar Tomt AS 100,00 Oslo 1 - 3) - Aker Trainee AS 100,00 Oslo - - 3) - Startfase 242 as 100,00 Oslo - - 3) - Opptur Molde AS 100,00 Oslo 1 - 3) 1 Akerhallen AS 100,00 Oslo 1 - 3) 1 Aker American Shipping Holding AS 100,00 Oslo 1 -40 3) - 12 831

1) Aker ASA's ownership and voting power are the same for all companies. 2) 100% of the group equity as of 31 Dec and 2006 profit after financial items 3) 100% of the company's equity and 2006 profit after financial items 4) Subsidiary company in the group 5) Spesification of investment in public listed companies as of 31.12.2006

Number of Market value Market value Amounts in NOK million shares owned pr share 31.12 Total

Aker Kværner ASA 27 520 930,00 778,00 21 411 Aker Yards ASA 11 452 010,00 483,00 5 531 Aker Floating Production ASA 11 022 506,00 89,00 981 Total 27 924

The shares considered as long-term strategic investment by Aker ASA. Short-term fluctations in the marked is therefore not taken into consideration for accounting purposes. The shares are recorded by historical cost

NOTE 6: OTHER LONG-TERM FINANCIAL ASSETS Other long-term financial assets consist of the following:

Amounts in NOK million 2006 2005 2004

Other long-term receivables 1 15 51 Pension funds - 1 36 Activated costs relating to new debt 190 - 34 Total other long-term financial assets 191 16 121 Long-term receivables on Group companies (1) 9 903 7 720 605 Total 10 093 7 736 726

All receivables are due after 1 year. Interest conditions are according to marked conditions.

Aker ASA Annual report 2006 101 Annual accounts Aker ASA

(1) the amounts consist of interest- bearing receivable of 9 903 NOK mill and an interest- free of NOK 0 million and consist of the following:

Amounts in NOK million 2006

Aker American Shipping Holding AS 1 011 Aker Maritime Finance AS 7 147 Aker Material Handling Ltd 96 Aker Seafoods Holding AS 472 Aker Capital AS 338 Aker Mekaniske Verksted AS 411 Aker Geo Seismic AS 234 Andre 26 Total 9 903

NOTE 7: OTHER SHORT-TERM INVESTMENTS Other short-term investments consist of the following:

Amounts in NOK million 2006 2 005 Bond - 50 Total - 50

The assessment of market value is based on the stock value.

NOTE 8: SHAREHOLDERS EQUITY As of 31 Dec 2006 Aker ASA's share capital consists of the following share classes:

Total par value (NOK million) Number of shares Shares Shares Shares Shares issued Own shares outstanding Par value issued outstanding A-shares 72 374 728 7 354 72 367 374 28 2 026 2 026 B-shares 42 400 713 - 42 400 713 28 1 187 1 187 Total share capital 114 775 441 7 354 114 768 087 3 214 3 214 Own shares - Share premium reserve 2 071 Other paid-in capital 3 236 Total paid in capital 8 521

All the A-shares have voting power and can receive dividends, except that Aker ASA has no voting power for their A-shares owned. The B-shares are owned 100% by Aker Maritime Finance AS. The B-shares do not have any voting power, but can receive dividends.

The 20 largest shareholders as of 05 January 2007 (A-shares): Number shares Percent TRG Holding AS 48 245 048 66,66 JP Morgan Chase Bank 2 156 449 2,98 Bank Of New York 1 658 411 2,29 Reka AS 1 200 000 1,66 The Resource Group 824 642 1,14 Morgan Stanley 757 412 1,05 Nordea Bank Sweden 688 443 0,95 JP MBLSA Nordea 553 400 0,76 Skandinaviska Enskilda A/C 537 696 0,74 Skandinaviska Enskilda Oslo 400 002 0,55 Vital Forsikring ASA 385 982 0,53 Nordea Bank Plc 352 722 0,49 CIP- Resolution Asset 331 824 0,46 Bank Of New York, BR 300 740 0,42 Spencer Trading Inc 300 000 0,41 Clearstream Banking 245 538 0,34 Morgan Stanley & Co 217 284 0,30 Voldberg Tore Aksel 200 002 0,28 DnB Nor Norge 192 324 0,27 SIS Segaintersettle 177 980 0,25 Total 59 725 899 82,53

102 Aker ASA Annual report 2006 Annual accounts Aker ASA

Changes in shareholders equity in 2006 are shown below:

Share premium Own Other paid-in Total paid-in Other Retained Total Amount in NOK million Share capital reserve shares equity (1) capital equity earnings equity

Equity as of 01.01.05 3 214 2 071 - 3 236 8 521 4 661 4 661 13 182 Ordinary dividends - -2 181 -2 181 -2 181 Loss - 1 052 1 052 1 052 Equity as of 31 Dec 3 214 2 071 - 3 236 8 521 3 531 3 531 12 052

(1) Other paid-in equity is included in the basis for calculate free equity, regarding calculation of dividend capacity.

The changes in equity 2004 to 2006 are shown below:

Amounts in NOK million 2006 2005 2004 Opening balance 13 182 7 807 - Net profit for the year 1 050 2 027 -448 Continuity difference merger - - -595 Paid in capital - 5 713 9 253 Dividends -2 181 -2 353 -403 Others - -13 - Balance as of 31 Dec 12 052 13 182 7 807

NOTE 9: DEFERRED TAX

The table below shows the difference between book and tax value at the end of 2006, and deferred tax liability at the end of 2006 and change in deferred tax:

Amounts in NOK million 2006 2005 2004

Differences in accruals 204 204 - Differences of receivables -433 -217 -359 Total short-term differences -229 -13 -359 Fixed assets differences -21 -21 -20 Net pension liability -101 -104 -91 Capital gains and losses reserve 30 37 46 Total Long-term differences -92 -88 -65 Total differences -321 -101 -424 Tax losses carried forward -1 558 -1 671 -3 158 Total basis -1 879 -1 772 -3 582 Net deferred tax 28% -526 -496 -1 003 Deferred tax receivable not in the balance sheet 526 496 509 Deferred tax receivable - - 494 Deferred tax liability - - -

Due to the new tax amendment in Norway, differences in shares are reversed in 2004.

Aker ASA Annual report 2006 103 Annual accounts Aker ASA

ESTIMATED TAXABLE PROFIT

Amounts in NOK million 2006 2005 2004 Profit before tax 995 1 982 154 Received group contribution against investments in subsidiaries 203 2 092 - Profit and Loss regarding merger - - -312 Profit after finance for tax purposes 1 198 4 074 -158 Net not deductible items -1 210 -2 174 -1 155 Change in differences 220 -117 - Taxable profit/loss NOKUS companies - - - Use of deferred tax -208 -1 783 - Estimated taxable income before Group contributions 0 0 -1 313 Tax payable (28%) in the Profit and loss accounts - - - Tax of Group contribution - - - Tax receivable correction earlier years - - 13 Tax payable (28%) in the balance sheet - - 13

Tax expence: 2006 2005 2004 Tax payable in the Profit and Loss account - - - Change in deferred tax - 541 92 Correction change in deffered tax earlier years - - -59 Tax receivable not in the balance sheet 1) - - 509 Tax on received group contribution against investments in subsidiaries -57 -586 - Total tax expense/(income) -57 -45 542 Tax expense/(income) on ordinary profit and loss -57 -45 542 Tax expense/(income) on extraordinary profit and loss - - - Total tax expense/(income) -57 -45 542 Tax expence due to merger 60 Tax expence in the Profit and Loss accounts (+) -57 -45 602

1) Tax receivable not in the balancesheet due to the new norwegian tax emendment in 2004. There will be no tax on gain/loss sale of shares.

The 2006 figures are based on estimates of different non deductable taxable income, non deductable items and differences between accounting and taxable items. The final items will be calculated in the income-tax return, and may differ from the estimates above.

Explanation why the tax income eventually differ from 28% of profit before tax:

28 % tax of profit before tax 278 Tax against equity -57 Permanent differences and others -278 Calculated tax income -57

Effective tax percent (tax income compared with profit/loss before tax) 6 %

NOTE 10: PENSION LIABILITIES/ASSETS

Aker ASA covers its pensions mainly through a group pension plan in a life insurance company. The plan has been treated for accounting purposes as a defined benefit plan. Aker ASA also has uninsured pensions liabilities.

Actuarial calculations have been made based on the following assumptions:

Expected return 5,5 % Discount rate 4,5 % Wage increases 4,3 % Social security base adjustment/inflation 3,8 % Pension adjustment 2,5 %

104 Aker ASA Annual report 2006 Annual accounts Aker ASA

PENSION EXPENSES

Overfunded Underfunded Amounts in Nok million plans 1) plans 1) Total 2006 Total 2005 Total 2004

Present value of the year's pension earnings -3 - -3 -2 -2 Interest cost on accrued pension liabilities -2 -5 -7 -9 -9 Expected return on pension funds 2 - 2 3 3 Allocated effect of change in estimates and pension plans - - - - - Change in social security - - - 2 2 Net pension expenses -3 -5 -8 -6 -6

NET PENSION LIABILITIES/ASSETS AS OF 31 DEC:

Overfunded Underfunded Amounts in Nok million plans 1) plans 1) Total 2006 Total 2005 Total 2004 Present value of accrued pension liabilities -51 -100 -151 -159 -156 Value of future wage increases -12 -1 -13 -8 -4 Calculated pension liabilities -63 -101 -164 -167 -160 Value of pension funds 47 - 47 53 56 Calculated net pension funds/(liabilities) -16 -101 -117 -114 -104 Amortization 2) 16 5 21 15 20 Social security - -5 -5 -5 -7 Net pension funds/(liabilities) 3) - -101 -101 -104 -91 Number of persons 29 25 54 - -

1) Underfinansierte planer: Verdien av pensjonsforpliktelsen overstiger verdien av pensjonsmidlene. Overfinansierte planer: Verdien av pensjonsmidlene overstiger verdien av pensjonsforpliktelsen. 2) Amortisering : ikke resultatført virkning av estimatendringer og endringer i pensjonsplaner. 3) Det er avsatt arbeidsgiveravgift på kontrakter med netto pensjonsforpliktelser.

Aker ASA's net liabilities are presented in the balance sheet as an interest-free long-term liability. Net pension funds are recorded in the balance sheet as interest-free long-term receivables. Pension funds are invested in accordance with the general guidelines for life insurance companies. Recorded pension liablilities are calculated on the basis of estimated pension liabilities and accrued in accordance with generally accepted accounting principles. The pension liability recorded in the accounts is not the same as the pension rights legally earned as of 31 December.

The company is required to have a collective pension plan. The companies pension plan are according to legislations.

NOTE 11: DEBT Long-term debt to group companies has maturity date longer than 5 years. Also see note 16 regarding subordinated debt. Interest conditions are according to marked conditions.

Interest bearing long-term debt external is distributed as shown below: Convertible- Dept to credit Other Total Amounts in NOK million loan institutions loan 2006

Year 2007 803 803 2008 1 000 1 000 2009 - 2010 500 500 2011 - After 2011 500 14 514 Total 2006 2 803 - 14 2 817 2005 1 357 - 14 1 371 2004 359 1 440 12 1 811

Average yearly interest rate on the interest- bearing loans is 5,7%. Bond loans are reduced by loan expences of 17 mill and will be expenced over the life time for det debt. Bond loans are in NOK. Other loans are in USD Short-term loans to group companies cosists mainly of nok 51 mill accrued interest and nok 7 mill others.

Aker ASA Annual report 2006 105 Annual accounts Aker ASA

Short-term debt Group companies consists of the following:

Amounts in NOK million 2006 Accrued interests 51 Dividend to Aker Maritime Finance AS 806 Others 7 Total 864

Allocated dividends of NOK 2 181 mill consists of NOK 806 mill to Aker Maritime Finance AS, and payment of NOK 1 375 mill to external share holders.

NOTE 12: LEGAL DISPUTES There is no major legal disputes as of 31.12.

NOTE 13: GUARANTEE OBLIGATIONS

Amounts in NOK million 2006 2005 Loan guarantee 933 1 169 Performance guarantee 963 221 Total 1 896 1 390

Aker ASA has pledged a NOK 186,7 mill Aker Seafoods Holding AS receivable. The increase in performance guarantee relates mainly to Aker Philadelphia Shipyard Inc.

NOTE 14: FINANCIAL MARKET RISK Foreign currency balance sheet items are naturally hedged, to the extent that borrowing and lending in the same currency coincide.

Aker has loan and guarantee commitments that contain covernants as to equity ratio and other issues. At the end of the 2005 accounting year, Aker met all loan and guarantee covernants.

Some Group subsidiaries are exposed to risk associated with the value of their investments in subsidiaries, due to changes in market prices for raw materials and semi-processed goods, to the extent that such fluctuations result in changes to these companies’ competitiveness and earnings potential over time.

Exposure to risk arising from foreign currency exchange rate fluctuations is identified and reduced through continuous monitoring and adjustment of the Group’s collective portfolio of loans and financial instruments. Exchange risk related to investments in foreign currencies is hedged by modifications to the loan portfolio and/or via other financial instruments.

Some Group subsidiaries enter into ongoing hedging transactions related to individual subsidiaries’ sales in foreign currencies. Such hedging is done to reduce the exchange rate risk affecting sales contracts.

The company has the following unrealised derivates as of 31.12: Value Gain as of Amounts in NOK million Due Strike shares pr 31.12.06 Odim ASA 12.04.2007 109 132 23 Sum 109 132 23

The amount is included in other short-term receivables.

NOTE 15: WRITE-DOWNS SHARES AND RECEIVABLES Writedowns shares and receivables as shown below:

Amounts in NOK million 2006 Write-downs shares 1) 64 Write-downs receivables 2) 185 Total 249

1) Consist mainly write down of Molde Fotball AS and RGI Inc. 2) Consist mainly write down of Cork Oak Holding Ltd

106 Aker ASA Annual report 2006 Annual accounts Aker ASA

NOTE 16: SUBORDINATED DEBT GROUP COMPANIES Subordinated debt as shown below:

Amounts in NOK million 2006 Aker Geo Seismic AS 541 RGI (Europe) BV 1 914 RGI Inc 1 234 Aker Maritime Finance AS 1 146 Total subordinated debt 4 835

The loans are sub-ordinatet to all Aker ASA other liabilities, and is due after external debt is paid. The interest conditions is 12 mnd NIBOR + 1% margin.

NOTE 17: RESTRICTED CASH The bank deposit of NOK 522 mill includes restricted cash of NOK 52 million.

NOTE 18: EVENTS AFTER THE BALANCE SHEET DATE The company has sold parts of the following subsidiary in January 2007:

Share as of 31.12.06 Share as of Jan 07 Value Number sold Aker Kværner ASA 50,01 40,1 660 5 454 207 Aker Yards ASA 50,4 40,1 460 2 340 722

The share sale strengthens Aker`s ability to contribute to further ndustrial evelopment at Aker Yards and Aker Kværner and to generating additional hareholder value for them and Aker. The interaction in this value-creating, triangle of Aker companies will continue after the share sale

NOTE 19: SHARES OWNED BY THE LEADERSHIP/BOARD Aker ASA shares owned as of 31.12.2006:

Number of shares Kjell Inge Røkke 48 245 048 Bengt A. Rem 10 000 Harald Magne Bjørnsen 700 Kjeld Rimberg % Co AS v/ Kjeld Rimberg 10 300 Schrøder Consult ApS v/ Lone Fønss Schrøder 1 173 Lapas v/Leif-Arne Langøy 1) 31 000

1) Also owns 133 333 b-shares (0,26%) in TRG Holding AS.

Aker ASA Annual report 2006 107 Annual accounts Aker ASA

Note 20 REMUNERATION PAID TO THE PRESIDENT & CEO AND GROUP MANAGEMENT

Remuneration to the board of directors Remuneration paid to the board of directors in 2006 is NOK 2 550 000. The members of the board, with exception of the chairman (see below), did not receive any other remuneration in 2006. The Chairman of the board (Leif-Arne Langøy) employee of Aker ASA, has not received any board remuneration from Aker ASA. In 2006 Leif-Arne Langøy did receive a salary of NOK 4 056 000. In addition he received a bonus of NOK 2 639 000 and other compensation of NOK 420 000. Net pension expenses for Leif-Arne Langøy is NOK 128 545.

The appointment of Leif-Arne Langøy could be terminated with a 6 months notice. Leif-Arne Langøy has a right to receive until 6 months salary from the date of termination, if the company terminates the contract. The salary will not be paid if he continues in an appointment in another company within the Aker Group. The remuneration plan for Leif-Arne Langøy includes a fixed salary, standard pension- and insurance plan for employees and a variable salary. The variable salary for Leif-Arne Langøy implies a potential a variable salary in addition until 100% of the fixed salary.

Remuneration to the board of directors in 2006: Amount in NOK Kjell Inge Røkke (Chairman until 30.3.06) 250 000 Leif-Arne Langøy (Chairman from 30.3.06) - Lone Fønss Schrøder 350 000 Bjørn Flatgård 300 000 Jon Fredrik Baksaas 300 000 Kjeld Rimberg 300 000 Kjell A. Storeide 300 000 Hanne Harlem (from 01.04.06) 150 000 Atle Tranøy (ansatte representant) 150 000 Harald Magne Bjørnsen (ansatte representant) 150 000 Bjarne Kristiansen (ansatte representant) 150 000 Stein Aamdal (ansatt representant) 150 000 Total 2 550 000

Directive of remuneration to the Group President and the Group Leadership The systems for the leadership remuneration main purpose are to stimulate to a strong and lasting profit oriented culture which makes an increasing value of the stocks. The accumulated remuneration to the leadership consists of marked based fixed salary, some few standard remuneration in addition and a variable salary.

The Group President and the Group leadership are members in a collective pension and insurance arrangement which involve all the employees. The companies practise standard employee hire contracts and standard hire conditions regarding retiring and salary after retiring for the Group President and the leadership. The company do not offer share option programs to the employees.

The program for the variable salary shall contribute to achieve good financial profit and leadership according to the company’s values and business ethic.

The variable salary is based on achievement of financial and personal goals, leadership according to the company’s values and development of the companies share value. The program represents a potential for the leadership to achieve a variable salary in addition up to 60% of the fixed salary. Achieved variable salary is paid over 3 years. Half of the achieved variable salary is paid the following year. The remaining amount is paid two years later together with a raise if the leader still is employed in the company. The yearly payments have a limit of one years fixed salary and the limit will be effective the two next years.

Excecutive Vice President Geir Arne Drangeid has received a fixed salary of NOK 1 652 000 and a bonus/variable salary of NOK 1 589 000 in 2006. The value of additional remuneration is NOK 179 000 and net pension expenses for Geir Arne Drangeid is NOK 106 000.

Martinus Brandal where Excecutive Vice President in Aker ASA until 30 June 2006, when he start as President and CEO of Aker Kværner ASA. In the period he was Excecutive Vice President in Aker ASA he received a fixed salary of NOK 1 154 000 and a bonus/variable salary of NOK 9 128 000 in 2006 (whereof NOK 7 000 000 is related to projects). The value of additional remuneration is NOK 257 000 and net pension expenses for Martinus Brandal is NOK 117 000.

The remuneration plan for Managing Director and other Group Leadership includes a fixed yearly salary, standard pension- and insurance plan for the employees and variable salary.

The appointments of other leaders can be terminated with a six months warning. If the company terminate the appointment, the leader will receive six months salary in addition after termination. The Group Leadership in Norway has a slow down from 60 years old with gradual slow down of salary and time of work until 67 years old.

108 Aker ASA Annual report 2006 Annual accounts Aker ASA

Auditors report

Aker ASA Annual report 2006 109 Annual accounts Aker ASA and Holding Companies

Aker ASA and Holding Companies Income Statement

The balance sheet of the Holding Company fore shows net debt relating to the holding Please note that Aker has elected to present shows the value at which each investment companies’ investments, i.e. the investments this balance sheet for Aker ASA and Hold- has been recorded and how much debt in Aker Kværner, Aker Yards, Aker Seafoods, ing companies in accordance with the cost Aker has assumed to finance the invest- Aker Material Handling, etc. method of accounting. Thus, shares in ments. In Akers view the Holding Company associated companies and subsidiaries are balance sheet is presented in a format that The balance sheet shows all holding com- not valued according to the equity capital provides relevant information to investors panies consolidated, whereas the operating method in the balance sheet. and analysts and makes it easier to cal- holding companies like Aker Kværner ASA, culate the NAV of Aker ASA. Aker Yards ASA and Aker Seafoods are The most significant holding companies included at original cost price. Original which are consolidated are : Aker ASA, Aker The traditional parent company balance acquisition cost means the cost price paid Maritime Finance, Resource Group sheet has been expanded to contain all the by the Holding Company. International as, RGI (Europe) BV, RGI Inc, wholly owned underlying administrative ser- RGI Holdings, Inc, RGI(Denmark) Aps, Aker vice companies and holding companies that For further comments on the applied Mek Verksted, Aker Capital, Aker Geo Seis- carry only investments, cash, and debt in accounting principles, see 99 “Accounting mic, Norway Seafoods Holding, Aker Sea- the balance sheet. The balance sheet there- Principles Aker”. foods Holding AS og Kværner Invest AS.

Amounts in NOK million Note 2006 2005

Operating revenue 1 4 643 1 613

Operating expenses -131 -104 Depreciation and amortization -8 -9 Exceptional operating items - - Operating profit 4 504 1 500

Received dividend 2 390 18 Other financial items 3 -113 -10 Exceptional financial items 4 -611 - Profit before tax 4 170 1 508 Tax 5 -41 -317 Profit after tax 4 129 1 191

110 Aker ASA Annual report 2006 Annual accounts Aker ASA and Holding Companies

Aker ASA and Holding Companies Balance, at 31.12.2006

Amounts in NOK million Note 2006 2005

ASSETS Intangible assets 7 1 038 879 Tangible fixed assets 7 38 41 Total intangible and tangible assets 1 076 920 Financial interest-bearing long-term assets 8 1 688 1 934 Financial interest-free long-term assets 7 156 241 Long term equity investments and interests 6 13 965 8 612 Total financial fixed assets 15 809 10 787 Total fixed assets 16 885 11 707

Short-term interest-free receivables 110 26 Short-term interest-bearing receivables 8 3 229 Liquid assets 9 895 1 102 Total current assets 1 008 1 357 Total assets 17 893 13 064

SHAREHOLDERS` EQUITY AND LIABILITIES Paid-in capital 8 521 8 521 Retained earnings 3 660 1 062 Total shareholders’ equity 10 12 181 9 583

Provisions and other interest-free long-term liabilities 11 214 252 Long-term interest-bearing liabilities 12 2 553 2 163 Total long-term liabilities 2 767 2 415

Short-term interest-free liabilities 11 1 860 1 056 Short-term interest-bearing liabilities 12 1 085 10 Total short-term liabilities 2 945 1 066 Total shareholders`equity and liabilities 17 893 13 064

Oslo, 28.02.2007 For Aker ASA

Leif-Arne Langøy (sign.) Lone Fønss G. Schrøder (sign.) Bjørn Ivar Flatgård (sign.) (Chairman) (Deputy Chairman) (Director)

Jan Fredrik Baksaas (sign.) Kjeld Rimberg (sign.) Kjell A. Storeide (sign.) (Director) (Director) (Director)

Hanne Harlem (sign.) Stein Aamdal (sign.) Bjarne E. Kristiansen (sign.) (Director) (Director) (Director)

Harald Magne Bjørnsen (sign.) Atle Tranøy (sign.) Bengt A. Rem (sign.) (Director) (Director) (Managing Director)

Aker ASA Annual report 2006 111 Annual accounts Aker ASA and Holding Companies

Aker ASA and Holding Companies Notes to the Accounts

NOTE 1: OPERATING INCOME

Operating income is allocted as follows:

Amounts in NOK million 2006 2005

Gain by establishing Aker Floating Production 767 Gain by establishing Aker Exploration 304 Gain by establishing Aker BioMarine 3 548 Sale of shares in Aker Seafoods 24 Gain by establishing Aker Drilling - 926 Gain of sale of Aker Hus - 400 Sale of shares in Aker Kværner and Aker Yards - 201 Gain by establishing Aker Invest II KS - 86 Total 4 643 1 613

NOTE 2: DIVIDEND RECEIVED

Dividend received consists of the following:

Amounts in NOK million 2006 2005

Aker Kværner 138 - Aker Yards 177 - Aker Seafoods 24 - Other 51 18 Total dividend received 390 18

NOTE 3: OTHER FINANCIAL ITEMS

Other financial items consists of the following:

Amounts in NOK million 2006 2005

Net Interest income company with in the same Group 130 72 Other interest expenses -202 -74 Other financial items -41 -8 Total other financial items -113 -10

NOTE 4: EXCEPTIONAL FINANCIAL ITEMS

Exceptional financial items consists of the following:

Amounts in NOK million 2006 2005

Write down receivable on TH Global -260 - Write down receivable on Sea Launch -183 - Write down receivable on Cork Oak Holding -168 - Total other financial items -611 -

112 Aker ASA Annual report 2006 Annual accounts Aker ASA and Holding Companies

NOTE 5: TAX

Amounts in NOK million 2006 2005

TAX PAYABLE: Norway 0 0 Abroad -23 -312 Total tax payable -23 -312

CHANGE IN DEFERRED TAX: Norway 98 -66 Abroad -116 61 Total change in deferred tax -18 -5 Total -41 -317

NOTE 6: LONG TERM EQUITY INVESTMENTS AND INTERESTS

Quotation Quotation Ownersship Number Book value 28.02.2007 28.02.2007 At 31.12.2006 in % of shares (Nok mill) (kr) (Nok mill)

Aker Kværner ASA 50.0 27 520 930 3 523 712.00 19 595 Aker Yards ASA 50.4 11 452 010 2 009 539.00 6 173 Aker Seafoods ASA 64.9 31 594 910 520 34.00 1 075 Aker American Shipping ASA 53.2 14 675 950 954 101.00 1 482 Aker Floating Production ASA 50.1 11 022 506 884 86.00 948 Bjørge ASA 39.9 17 518 861 203 17.50 307 Aker Drilling ASA 30.8 28 683 395 1 057 30.80 883 Total listed shares 9 150 30 463 Aker Exploration ASA 49.9 9 980 000 609 61.00 609 Aker BioMarine ASA 76.2 42 950 000 3 781 82.00 3 522 Total OTC shares 4 390 4 131 Aker Invest II KS 60.00 180 Aker Material Handling AS 100.00 0 Diverse 245 Total 13 965

NOTE 7: INTEREST-FREE LONG-TERM RECEIVABLES AND OTHER ASSETS

Interest-free long-term receivables and other assets are distributed as shown below:

Amounts in NOK million Receivable Other assets Total 2006 Total 2005

Deferred tax assets 762 762 772 Pension funds 8 8 8 Sea Launch - - 198 Receivables from companies in the same group - - - Other 148 314 462 183 Total 918 314 1 232 1 161

Aker ASA Annual report 2006 113 Annual accounts Aker ASA and Holding Companies

NOTE 8: OTHER INTEREST-BEARING CURRENT ASSETS AND LONG-TERM RECEIVABLES

Other interest-bearing current assets and long-term receivables from companies within the same group, associated companies, and external companies are as shown below:

Amounts in NOK million Short-term assets Long-term receivables Total 2006 Total 2005

Receivable, companies within the same group 0 1 646 1 646 1 527 Receivable, external 3 42 45 636 Total 3 1 688 1 691 2 163

NOTE 9: LIQUID ASSETS

Liquid assets amounts to 895 NOK million, whereof 293 NOK million are restricted.

NOTE 10 SHAREHOLDERS' EQUITY

As of 31 Dec 2006 Aker ASA's share capital consists of the following share classes:

Total par value (NOK million) Number of shares Shares Shares Shares Shares issued Own shares outstanding Par value issued outstanding A-shares 72 374 728 7 354 72 367 374 28 2 026 2 026 B-shares 42 400 713 - 42 400 713 28 1 187 1 187 Total share capital 114 775 441 7 354 114 768 087 3 214 3 214 Share premium reserve 2 071 Other paid-in capital 3 236 Total paid in capital 8 521

All the A-shares has voting power and can receive dividends. Aker ASA has no voting power for their A-shares owned. The B-shares are owned 100% by Aker Maritime Finance AS. The B-shares do not have any voting power, but can receive dividends.

Dividend of NOK 19.00 per share proposed by the Board of Director are included in the accounts.

Amounts in NOK million 2006 Dividend NOK 19.00 pr share 2 181 NOK 19.00 per B-shares to 100% subsidiaries Aker Maritime Finance 806 Excepted payment of dividend from Aker ASA in 2007 1 375

NOTE 11 INTEREST-FREE LIABILITIES

Interest-free liabilities are presented below:

Amounts in NOK million Short-term Long-term Total 2006 2005

Tax liabilities 7 70 77 325 Pension liabilities - 144 144 150 Dividend 1 375 0 1 375 470 Liabilities to companies in the same group 194 0 194 148 Other 284 0 284 215 Total 1 860 214 2 074 1 308

114 Aker ASA Annual report 2006 Annual accounts Aker ASA and Holding Companies

NOTE 12: INTEREST-BEARING DEBT

Interest-bearing debt is distributed among companies in the same group and external creditors as shown below:

Amounts in NOK million Short-term Long-term Total 2006 2005

Debt to companies in the same group - 197 197 254 Debt to external creditors 1 085 2 356 3 441 1 919 Total 1 085 2 553 3 638 2 173

Interest-bearing debt to external creditors is shown below:

Amounts in NOK million

Bond loans 2 786 1 618 Debt to credit institution 352 277 Debt to former minority shareholders in Norway Seafoods ASA - 8 Other debt 303 6 Total 3 441 1 909

Repayment interest bearing external debt are as follows:

Amounts in NOK million Bond loan Credit inst. Other Total Year 2007 802 283 0 1 085 2008 995 69 289 1 353 2009 0000 2010 495 0 0 495 2011 0000 After 2011 494 0 14 508 Total 2 786 352 303 3 441

Aker ASA Annual report 2006 115 Annual accounts Aker ASA and Holding Companies

Auditors report

116 Aker ASA Annual report 2006 Our performance

It is a goal that the share price reflects its underlying value Shareholder information

Shareholder matters Aker ASA is committed to maintaining an open and effective dialogue with its shareholders, potential investors, analysts, brokers, and the financial community in general. The timely release to the market of information that could affect the company’s share price helps ensure that Aker ASA’s share price reflects its underlying value.

Aker ASA’s goal is that the company’s shareholders will, over time, receive competitive 2006 share data returns on their share investments through a combination of dividends and share-price growth. In February 2006, Aker‘s Board of Di- Highest traded NOK 409.00 rectors adopted the following dividend po- Lowest traded NOK 199.00 licy: “Aker ASA’s dividend policy supports Share price as of 31 December NOK 401.00 the company’s ambition to maintain a solid Class A Shares issued as of 31 Dec. 72 374 728 balance sheet and liquidity reserves adequate Own Class A shares as of 31 Dec. 7 354 to handle future obligations. The company’s objective is to pay dividends annually that, Number of Class A shares issued and outstanding as of 31 Dec. 72 367 374 amount to 2-4 per cent of the company’s net Market capitalization as of 31 December NOK million 29 022 asset value. The determination of net asset value is Turnover ratio for 2006 % 142 based on the share price of Aker’s listed Proposed per-share dividend NOK per share 19.00 investments. For the 2005 and 2006 accounting years, dividend payments will most Stock-exchange listing likely be in the lower end of the stipulated Analysts interval.” Aker ASA was listed on the Oslo Stock Ex- The following securities brokers provide analy- The Board of Directors will propose to change on 8 September 2004. The company’s tic coverage of Aker ASA (as of 31 December Aker ASA’s Annual General Meeting that a per- shares are listed on the Oslo Stock Exchange’s 2006): share dividend of NOK 19.00 be paid for the main (OSEBX) list (ticker: AKER). Aker ASA’s Company Telephone 2006 accounting year. shares are on record with the Norwegian Re- gistry of Securities; the Class A shares have Enskilda Securities +47 21 00 85 00 the securities registration number ISIN NO Year Dividend Fondsfinans +47 23 11 30 00 001 0234552 and the Class B shares have 2004 0 the securities registration number ISIN NO Kaupthing +47 24 14 74 00 2005 - extraordinary 14.00 001 0236110. DnB NOR is the company’s re- Orion Securities +47 21 00 29 00 gistrar. 2005 6.50 DnB NOR Markets +47 915 03 000 2006 - proposed 19.00 Glitnir Securities +47 22 01 63 00 ABG Sundal Collier +47 22 01 60 00 Shares and share capital Aker ASA has 72 374 728 ordinary Class A shares and 42 400 713 Class B shares. Each share has a par value of NOK 28.00 (see Note 8 to the company’s annual accounts). As of 31 December 2006, the company had 17 308 shareholders, of whom 2.8 percent were non- Norwegian shareholders. All Class A is entitled to one vote. Class B shares have no voting rights. The company held all Class B shares s as of 31 Decem- ber 2006. In 2006, no share issues were carried out.

Aker ASA annual report 2006 117 Our performance

Majority shareholder Share-price development Aker ASA’s majority shareholder is Kjell ■ Aker ASA ■ OSEBX

Inge Røkke, who holds 67.8 percent of the 500 company’s Class A shares via his privately held company TRG. The Aker group compri- 400 ses a series of companies that legally and fi- 300 nancially are independent units. Nevertheless, Aker companies have many commonalities, 200 and the active ownership of Aker ASA provi- 100 des a unifying influence. 0 Aker’s long-term industrial approach, its shareholder structure, and its management model imbue the Aker companies with auto- 08.09.04 30.09.04 29.10.04 30.11.04 30.12.04 31.01.05 28.02.05 31.03.05 29.04.05 31.05.05 30.06.05 29.07.05 31.08.05 30.09.05 31.10.05 30.11.05 30.12.05 31.01.06 28.02.06 31.03.06 28.04.06 31.05.06 30.06.06 31.07.06 31.08.06 29.09.06 31.10.06 30.11.06 29.12.06 31.01.07 28.02.07 nomy and decisiveness. Just as Aker ASA carries the imprint of its main shareholder Current Board authorizations site, www.akerasa.com. This online resource Kjell Inge Røkke, Aker puts its mark on the In Aker ASA’s Annual General Meeting on 30 includes the company’s quarterly and annual development of each Group company. March 2006 the general meeting unanimously reports, prospectuses, corporate presenta- Through the exercise of active ownership, resolved the following authorisation for the tions, articles of association, financial calen- Aker intends to create value that benefits all board to purchase company shares: dar, and the company’s Investor Relations stockholders. ”The board is authorised to acquire com- and Corporate Governance policies, along From time to time, agreements are ente- pany shares up to 7 237 473 of total number with other information. red into between two or more Aker companies. of shares, with an aggregate nominal value of Shareholders can contact the company at: The boards of directors and other parties NOK 202 649 244. The authorisation also pro- [email protected]. involved in the decision-making processes vides for acquisition of agreement liens in sha- related to such agreements are all critically res. The lowest and highest purchase amount Electronic interim and annual aware of the need to handle such matters in for each share shall be NOK 4 and NOK 800 reports the best interests of the involved companies, respectively. The power of attorney is valid in Aker ASA encourages its shareholders to re- in accordance with good corporate gover- 18 (eighteen) months as from 30 March 2006.” ceive the company’s annual reports electroni- nance practice. If needed, external, indepen- cally via the electronic delivery service of the dent opinions are sought. Stock options Norwegian Registry of Securities (VPS). Sub- As of 31 December 2006 Aker ASA has no scribers to this service receive annual reports options programme. in PDF format by email. VPS services (VPS- Investortjenester) are designed primarily for Investor relations Norwegian shareholders. VPS distribution ta- Aker ASA seeks to maintain an open and ef- kes place at the same time as distribution of fective dialogue with shareholders, financial the printed version of Aker ASA’s annual re- analysts, and the financial community in ge- port to shareholders who have requested it. neral. In addition to meetings with analysts Quarterly reports, which are generally only and investors, the company schedules regu- distributed electronically, are available from lar presentations at major financial centers in the company’s website and other sources. Europe and the United States. Shareholders who are unable to receive the All Aker ASA’s press releases and investor electronic version of quarterly reports may relations (IR) publications, including archived subscribe to the printed version by contac- material, are available at the company’s web- ting Aker ASA’s investor relations staff.

118 Aker ASA annual report 2006 Our performance

It is a goal that the share price reflects its underlying value

Nomination committee Share capital development The company’s nomination committee has the following members: Kjell Inge Røkke, Ger- Year Share capital Number of Number of Par value Class A and Class NOK Class A shares Class B shares B shares NOK hard Heiberg og Rune Bjerke. Shareholders who wish to contact the nomination commit- 2004 2 422 897 876 44 131 354 42 400 713 28.00 tee may do so using the following email add- 2005 3 213 712 348 72 374 728 42 400 713 28.00 ress: [email protected]. 2006 3 213 712 348 72 374 728 42 400 713 28.00 Annual General Meeting Annual General Meetings are normally held in March. Written notification is sent to all share- Twenty largest Class A shareholders holders individually or to the shareholder’s no- as of 20 February 2007 minee. To vote at the shareholders’ meeting, shareholders (or their duly authorized repre- Number of Class Ownership Name A shares held (in %) sentative) must either be physically present, or must vote by proxy. TRG HOLDING AS 48 245 048 66.66 % USB AG, LONDON BRANC S/A IPB SEGREGATED 3 786 390 5.23 % Geographic distribution of ownership REKA AS 1 200 000 1.66 % as of 20 February 2007 THE RESOURCE GROUP TRG 824 642 1.14 % Nationality Number of Ownership NORDEA BANK SWEDEN A C17 687 943 0.95 % shares (in %) JPMBLSA NORDEA LUX LENDING 608 320 0.84 % Non-Norwegian 11 079 134 15,3 % shareholders SKANDINAVISKA ENSKIL MERCHANG BANKING 558 532 0.77 % SPENCER TRADING INC. 400 000 0.55 % Norwegian 61 295 594 84,7 % shareholders NORDEA BANK PLC FINLAND 352 722 0.49 % SKANDINAVISKA ENSKIL (PUBL) OSLOFILIALEN 343 502 0.47 % Total 72 374 728 100,0 % VITAL FORSIKRING ASA OMLØPSMIDLER 322 530 0.45 % SKANDINAVISKA ENSKIL A/S CLIENTS ACCOUNT 305 126 0.42 % BANK OF NEW YORK, BR BNY GCM CLIENT ACCOUNT 289 780 0.40 % CLEARSTREAM BANKING CID DEPT, FRANKFURT 247 593 0.34 % WENAASGRUPPEN AS 220 000 0.30 % DnB NOR MARKETS, AKS EGENHANDELSKONTO 201 770 0.28 % BARCLAYS BANK PLC RE BARCLAYS CAPITAL 191 243 0.26 % MORGAN STANLEY & CO 190 083 0.26 % UBS AG, LONODN BRANC EQUITIES/CORPORATE 185 509 0.26 % MORGAN STANLEY AND C CLIENT EQUITY ACCOUNT 182 300 0.25 % Total, 20 largest shareholders 59 343 033 81.98 % Other shareholders 13 031 695 18.02 Total 72 374 728 100 %

Aker ASA annual report 2006 119 Organisation and governance

Corporate governance

Aker’s corporate governance policy was adopted by the Board of Directors of Aker ASA in 2004. The principles are based on the Norwegian Code of Practice for Corporate Governance, dated December 2005. The following presents Aker’s practices regarding each of the recommendations contained in the Code of Practice.

Purpose Dividends Freely negotiable shares Aker’s corporate governance principles Aker’s dividend policy is included in the sec- All of Aker’s Class A shares are freely nego- are intended to ensure an appropriate divi- tion Shares and shareholder matters, see tiable. No restrictions on transferability are sion of roles and responsibilities among the page 118 of this annual report. The Group’s found in the company’s articles of associa- company’s owners, its Board of Directors, dividend policy is among the factors conside- tion. All Class B shares are held by Aker Ma- and its executive management. An appro- red as part of the Board’s proposal for alloca- ritime Finance AS, which is a wholly owned priate division of roles is intended to ensure tion of profit for 2006. subsidiary of Aker ASA. Class B shares are that goals and strategies are established, that not traded in practice. adopted strategies are implemented, and that Board authorizations performance is subject to measurement and Current Board authorizations to increase Annual shareholders’ meetings follow-up. The principles also help ensure that share capital and acquire own (treasury) sha- The company encourages shareholders to the Group’s activities are subject to satisfac- res are presented in the section Shareholder participate in shareholders’ meetings. Its tory control. An appropriate division of roles information on page 119 of the annual report. goal is to distribute notices of shareholders’ and satisfactory control contribute to the gre- meetings and comprehensive supporting in- atest possible value creation over time, to the Equal treatment of shareholders formation, including the recommendations of benefit of owners and other stakeholders. and transactions with close the nomination committee, no later than two associates weeks before the shareholders’ meeting. The Values and ethical guidelines Aker has two classes of shares. All Class A deadline for shareholders to give notice of The Board has approved and adopted the shares carry voting rights; Class B shares do their intention to attend the meeting is set as Group’s corporate values and ethical guide- not have voting rights. Other than with regard close to the date of the meeting as possible. lines. Aker’s corporate values are presented to voting rights, all Aker ASA shares carry the Shareholders who are unable to attend the on page 8 of this annual report. same rights. All Aker Class B shares are held meeting in person may vote by proxy. Pursu- by the company Aker Maritime Finance AS, ant to Aker’s articles of association, the Board Business which is a wholly owned subsidiary of Aker Chairman, or other person appointed by the Aker’s business clause is as follows: ASA. Class B shares are not listed. Board Chairman, chairs shareholders’ mee- “The company’s activities consist of owning In cases of material transactions between tings. To the extent possible, Board members, and operating industrial businesses and other, the company and a shareholder or member the nomination committee leader, and the au- related activities, capital management and of the Board or executive management, or ditor attend shareholders’ meetings. other group functions, and participation in or parties closely related to the aforementioned, Minutes of shareholders’ meetings are acquisition of other activities.” the Board must provide an independent eva- published as soon as practically possible via The business clause ensures that sha- luation of the transaction based on the prin- the Oslo Stock Exchange messaging service reholders have control of the business and ciple that such transactions must be at arm’s www.newsweb.no (ticker: AKER) and on the its risk profile, without limiting the Board or length. If needed, external, independent opi- company’s website www.akerasa.com. management’s ability to carry out strategic nions are sought. The two preceding senten- and financially viable decisions within the defi- ces also apply to transactions between Aker Nomination committee ned purpose. The Group’s financial goals and and Group companies in which there are The company has a nomination committee, main strategies are presented in this report minority interests. as set forth in the company’s articles of as- and in the Board of Directors’ report. Aker has prepared guidelines designed to sociation. Pursuant to the articles of associa- ensure that members of the Board of Direc- tion, the nomination committee comprises no Equity and dividends tors and executive management notify the fewer than three members. The composition Equity Board of any direct or indirect stake they of the nomination committee must reflect the The Group’s equity as of 31 December 2006 may have in agreements entered into by the interests of shareholders, as well as maintain amounted to NOK 20 723 million, which cor- Group. the committee members’ independence from responds to an equity ratio of 27.6 percent. See additional information on transactions Aker’s Board and executive management. No- Aker regards the equity structure as appro- with close associates in Note 37 to the Group mination committee members and chair are priate and adapted to its objectives, strategy, consolidated accounts. elected by the company’s shareholders’ me- and risk profile. eting, which also determines remuneration payable to committee members.

120 Aker ASA annual report 2006 Organisation and governance

Akers corporate governance principles are intended to ensure an appropriate division of roles and responsibilities among the company’s owners, its Board of Directors, and its executive management

Pursuant to the articles of association, the man, and President and CEO. The Board in- ment are found in Note 38 to the Group con- nomination committee recommends candi- structions also feature rules as to Board sche- solidated account of this annual report and dates for members of the Board of Directors. dules, rules for notice and chairing of Board will be presented to the annual shareholders’ The nomination committee also makes re- meetings, decision-making rules, the general meeting for orientation and an advisory vote. commendations as to remuneration of Board manager’s duty and right to disclose informa- members. tion to the Board, professional secrecy, impar- Information and communication In 2006, Aker’s nomination committee tiality, etc. The company has prepared an Investor Rela- comprised the following members: The Board evaluates its own performance tions (IR) policy. Aker’s reporting of financial and expertise once a year. and other information is to be based on open- • Kjell Inge Røkke, chairman ness and on equal treatment of shareholders, • Rune Bjerke, member Risk management and internal the financial community, and other interested • Gerhard Heiberg, member control parties. Aker has established a comprehensive set of Through systematic IR work, the company Members of the nomination committee were internal procedures and systems to ensure seeks to ensure access to capital at compe- elected for a two-year term at Aker’s 30 March unified and reliable financial reporting. Each titive terms and to ensure shareholders cor- 2006 annual shareholders’ meeting. Rune of the Group’s business areas must evaluate rect pricing of shares. These goals are to be Bjerke has announced that he will step down its internal control systems and procedures accomplished through correct and timely from the nomination committee as of Aker’s with regard to financial reporting annually. In distribution of information that can affect annual shareholders’ meeting in 2007. addition, individual companies regularly carry the company’s share price; the company is out audits of their adherence to systems and also to comply with current rules and market Board composition and procedures. practices, including the requirement of equal independence The Board receives monthly reports on the treatment. All stock exchange notifications Pursuant to the company’s articles of asso- company’s financial performance and - sta and press releases are made available on the ciation, the Board comprises between six tus reports for the company’s most important company’s website www.akerasa.com; stock and twelve members, one-third of whom are individual projects. exchange notices are also available from to be elected by and among Group employ- www.newsweb.no. All information that is distri- ees. Further, up to three shareholder-elected Remuneration of the Board of buted to shareholders is simultaneously pub- deputy board members may be elected. The Directors lished on Aker’s website. Board chairman and deputy chairman are Aker’s shareholders’ meeting determines the The company’s financial calendar is found elected by the Board under an agreement Board’s remuneration based on the recom- on page 6 of this annual report. with employee representatives; the agre- mendations of the Group’s nomination com- ement provides that the company is not to mittee. Remuneration does not depend on Takeovers have a corporate assembly. Board members Aker’s financial performance. Additional infor- In light of Aker’s ownership structure, the are elected for a period of two years. mation on remuneration paid to Board mem- Board has thus far not deemed it appropriate The current composition of the Board is bers for 2006 is presented in Note 38 to the to prepare separate guidelines for takeovers. presented on page 122 of the annual report; Group consolidated accounts. the Board members’ expertise, capabilities, Auditor and independence are also presented. Board Remuneration of executive The auditor participates in the Board meeting members’ shareholdings are presented in management that deals with the annual accounts. Note 39 to the consolidated accounts. The The Board has adopted guidelines for remu- Remuneration for auditors, presented in shareholder-elected Board members repre- neration of executive management. Salaries Note 6 to the 2006 group accounts, is stated sent a combination of expertise, capabilities, and other remuneration to the general ma- for the two categories of auditing and other and experience from the finance business, nager are set by the company’s nomination services. The Board will assess whether gui- industry, public policy, and NGOs. committee, and presented to the Board. delines should be established for executive Additional information on remuneration management’s use of auditors for services The work of the Board of Directors paid to members of executive management other than auditing. The Board has adopted board instructions that in 2006 is presented in Note 38 to the Group regulate areas of responsibility, tasks, and di- consolidated accounts. The Group’s guideli- vision of roles of the Board, Board Chair- nes for remuneration to executive manage-

Aker ASA annual report 2006 121 Organisation and governance

Board of directors

Leif-Arne Langøy chairman. He has previously ser- TRG Holding. Langøy holds an MBA ved as President & CEO of the Aker degree from the Norwegian School Board Chairman Yards Group, and as a Managing of Economics and Business Admi- Director for Aker Brattvaag for 13 nistration. As of 1 February 2007 years. He is chairman of the board Mr. Langøy holds 31 000 shares in of Aker ASA, Aker Kværner, Aker the company, and no stock options. Yards, Aker Seafoods, Aker Ame- Mr. Langøy is a Norwegian citizen. Leif Arne Langøy (born 1956) has rican Shipping, Aker Drilling, Aker He has been elected for the period been President & CEO of Aker ASA, Floating Production, Aker BioMarine, 2005-2007. former Aker RGI, since 2003. Since Aker Exploration and Aker Material 2006 he has also been the board Handling, and deputy chairman of

Lone Fønss Schrøder of Copenhagen and a Master of tive director of Yara International Economics degree from Handels- ASA and Vattenfall AB. As of Deputy Chairman højskolen, Copenhagen. Ms. Fønss 1 February 2007 Ms. Fønss Schrø- Schrøder has broad international der holds 1 173 shares in the com- experience, acquired during 21 ye- pany, and no stock options. Lone ars in senior management and via Fønss Schrøder is a Danish citizen. board positions at A.P. Møller-Ma- She has been elected for the period Lone Fønss Schrøder (born 1960) is ersk; she has also been a partner 2006-2008. President in Wallenius Lines in Swe- and co-owner of CMC Biopharma- den. Lone Fønss Schrøder received ceuticals in Denmark. Ms. Fønss her law degree from the University Schrøder is currently a non-execu-

Bjørn Flatgård Mr. Flatgård (born 1949) has been of Management. As of 1 February President and CEO of Elopak AS 2007 Mr. Flatgård holds no shares in Board Member since 1996. He previously served the company, and no stock options. as President and CEO for Nyco- Mr Flatgård is a Norwegian citizen. med Pharma and Executive Vice He has been elected for the period President for Hafslund Nycomed 2006-2008. and Nycomed AS. He holds several board positions. Mr. Flatgård is a graduate from the Norwegian Uni- versity of Science and Technology and from the Norwegian School

Kjeld Rimberg Kjeld Rimberg (born 1943) is an in- Railway (NSB). As of 1 February dependent consultant educated as 2007 Mr. Rimberg holds 10 300 sha- Board Member a construction engineer from the res in the company, and no stock Norwegian University of Science options. Mr. Rimberg is a Norwegian and Technology. He has previous citizen. He has been elected for the work experience within research period 2006-2008. and administration as a board member at Kongsberggruppen, Statoil, Nationaltheatret, Aschehoug, Fal- kengruppen, and as a former Presi- dent & CEO for the Norwegian State

Jon Fredrik Baksaas Business Administration and has Stolt-Nielsen Seaway and Det nor- additional qualifications from IMD ske Veritas. He is a board member Board Member in Lausanne, Switzerland. He has of Svenska Handelsbaken AB. As of been President and CEO of Telenor 1 February 2007 Mr. Baksaas holds since June 2002. He joined Telenor no shares in the company, and no in 1989 and was made Deputy CEO stock options. Mr. Baksaas is a Nor- in 1997. Baksaas has held positions wegian citizen. He has been elected Jon Fredrik Baksaas (born 1954) as Finance Director, Executive Vice for the period 2005-2007. holds a Master of Science in Busi- President and CEO of TBK AS. Be- ness Administration from the Nor- fore joining Telenor, Baksaas held wegian School of Economics and finance-related positions in Aker AS,

122 Aker ASA annual report 2006 Organisation and governance

Kjell A. Storeide Kjell A. Storeide (born 1952) holds holds no shares in the company, a Business Economics degree from and no stock options. Mr. Storeide Board Member the Norwegian School of Mana- is a Norwegian citizen. He has been gement and Business Administra- elected for the period 2006-2008. tion. From 1990 to 2004, Storeide was CEO and part owner of Stokke Gruppen AS. Storeide is currently the board chairman of several Nor- wegian industrial companies, and a board member of Innovasjon Norge. As of 1 February 2007 Mr. Storeide

Hanne Harlem Hanne Harlem (born 1964) has holds no shares in the company, been managing director at the Uni- and no stock options. Ms. Harlem is Board Member versity of Oslo since 2004. She a Norwegian citizen. She has been holds a Cand. jur. degree. Ms. Har- elected for the period 2006-2008. lem has previous served as lawyer and Senior Vice President in Norsk Hydro ASA. She as i.a. been Minis- ter of Justice, a lawyer in Kredittilsy- net, and town councillor for children and education in The city of Oslo. As of 1 February 2007 Ms. Harlem

Atle Tranøy Group Union convenor Aker. Atle representative to the Board of Di- Tranøy (born 1957) is trained as rectors of Aker Maritime, Kværner, Board Member a pipe fitter and has been an em- Aker Kværner and Aker AS. As of 1 Elected by the employees ployee of Aker Stord since 1976. February 2007 Mr. Tranøy holds no Mr. Tranøy has been a full-time em- shares in the company, and no stock ployee representative since 1983. options. Mr. Tranøy is a Norwegian He has been a group union repre- citizen. He has been elected for the sentative in Aker Maritime since period 2004-2007. 1997, in Aker Kværner from 2002 and in Aker ASA from 2004. He has also been elected as an employee

Harald Magne Bjørnsen Group Union convenor Aker. Harald citizen. He has been elected for the Magne Bjørnsen F(born 1947) is a period 2004-2007. Board Member professional shipfitter and electrical Elected by the employees installer. An employee of Aker Elek- tro since 1978, Bjørnsen became a project leader in the electrical equipment and instrumentation de- partment in 1986. As of 1 February 2007 Mr. Bjørnsen holds 700 shares in the company, and no stock options. Mr. Bjørnsen is a Norwegian

Bjarne Kristiansen Group union convenor Aker Sea- foods. Bjarne Kristiansen (born Board Member 1955) has worked in the fishing in- Elected by the employees dustry since 1973. He has been the group union representative in Aker Seafoods since 1996. As of 1 Febru- ary 2007 Mr. Kristiansen holds no shares shares in the company, and no stock options. Mr. Kristiansen is a Norwegian citizen. He has been elected for the period 2004-2007.

Stein Aamdal Shop steward, for Aker Kværner Verdal. Stein Aamdal (born 1947) Board Member has been employed by Aker Verdal Elected by the employees since 1974. He is a trained fitter. He has been a union representative at Aker Verdal since 1990. As of 1 Fe- bruary 2007 Mr. Aamdal holds no shares in the company, and no stock options. Mr. Aamdal is a Norwegian citizen. He has been elected for the period 2004-2007.

Aker ASA annual report 2006 123 Organisation and governance

Management

Leif-Arne Langøy Leif Arne Langøy (born 1956) has rican Shipping, Aker Drilling, Aker been President & CEO of Aker ASA, Floating Production, Aker BioMarine, Board chairman and CEO former Aker RGI, since 2003. Since Aker Exploration and Aker Material 2006 he has also been the board Handling, and deputy chairman of chairman. He has previously ser- TRG Holding. Langøy holds an MBA ved as President & CEO of the Aker degree from the Norwegian School Yards Group, and as a Managing of Economics and Business Admi- Director for Aker Brattvaag for 13 nistration. As of 1 February 2007 Mr. years. He is chairman of the board Langøy holds 31 000 shares in the of Aker ASA, Aker Kværner, Aker company, and no stock options. Mr. Yards, Aker Seafoods, Aker Ame- Langøy is a Norwegian citizen.

Bengt A. Rem Bengt A. Rem (born 1961) is a state Oslo Børs. As of 1 February 2007 authorized accountant and a Mas- Mr. Rem holds 10 000 shares in the CFO ter of Business and Economics company, and no stock options. Mr. from the Norwegian School of Ma- Rem is a Norwegian citizen. nagement. Mr. Rem joined the Aker RGI Group in 1995 where he has, among other things, held the position as CFO and Chief of Staff. Be- fore joining the Aker RGI Group, Mr. Rem has among other things worked with Arthur Andersen & Co. and

Geir Arne Drangeid Mr. Drangeid (born 1965) is respon- Aker Maritime, and since 2002 he sible for communications, investor has been group SVP Communica- EVP relations and human resources and tions and Investor Relations in Aker has a background from journalism. Kværner. As of 1 February 2007 He joined the Company on 1 Sep- Drangeid holds no shares in the tember 2004. Mr. Drangeid has held company, and no stock options. Mr. various communications related po- Drangeid is a Norwegian citizen. sitions since 1990, when he joined Norwegian Contractors, then a subsidiary of Aker. In 1996 he became head of group communications in

Nils Are Karstad Lysø Nils Are Karstad Lysø (born 1968) Lysø is a Norwegian citizen. is Executive Vice President and EVP CEO of Aker Capital. Lysø joined Aker ASA in 2005. He has previously been a partner in the management consulting firm McKinsey & Com- pany (1992-2005). Mr. Lysø holds a MBA from the Norwegian School of Management. As of 1 February 2007 Lysø holds 2 000 shares in the company, and no stock options. Mr.

124 Aker ASA annual report 2006 Addresses

Addresses

Aker ASA Aker Kværner ASA Aker Yards ASA Fjordalleen 16 Prof. Kohtsv. 15 Fjordalleen 16 P.O. Box 1423 Vika P.O. Box 169 P.O. Box 1523 Vika NO-0115 Oslo NO-1325 Lysaker NO-0117 Oslo Norway Norway Norway

Telephone: +47 24 13 00 00 Telephone: +47 67 51 30 00 Telephone: +47 24 13 00 00 Telefax: +47 24 13 01 01 Telefax: +47 67 51 30 10 Telefax: +47 24 13 01 10 [email protected] [email protected] [email protected] www.akerasa.com www.akerkvaerner.com www.akeryards.com

Aker Seafoods ASA Aker Drilling ASA Aker American Shipping Inc. Fjordalleen 16 Strandsvingen 12 Philadelphia Naval Business Center P.O. Box 1301 Vika P.O. Box 319 Forus 2100 Kitty Hawk Avenue, NO-0112 Oslo NO-4066 Stavanger Philadelphia, PA 19112-1808, Norway Norway USA,

Telephone: +47 24 13 01 60 Telephone: +47 51 21 49 00 Telephone: +1 (215) 875-2600 Telefax: +47 24 13 01 61 Telefax: +47 51 21 49 01 Telefax: +1 (215) 875-2700 [email protected] [email protected] [email protected] www.akersea.com www.akerdrill.com www.akership.com

Aker BioMarine ASA Aker Exploration ASA Aker Floating Production ASA Fjordalleen 16 Fjordalleen 16 Snarøyveien 30 P.O. Box 1423 Vika P.O. Box 1423 Vika P.O. Box 137 NO-0115 Oslo NO-0115 Oslo NO-0216 Oslo Norway Norway Norway

Telephone: +47 24 13 00 00 Telephone: +47 24 13 00 00 Telephone: +47 22 94 73 00 Telefax: +47 24 13 01 06 Telefax: +47 24 13 01 06 Telefax: +47 22 94 73 01 [email protected] [email protected] www.akerbiomarine.com www.akerexploration.com www.aker-fp.com

Aker Material Handling ASA Aker Capital AS Fjordalleen 16 Fjordalleen 16 P.O. Box 1423 Vika P.O. Box 1423 Vika NO-0115 Oslo NO-0115 Oslo Norway Norway

Telephone: +47 24 13 00 00 Telephone: +47 24 13 00 00 Telefax: +47 24 13 01 11 Telefax: +47 24 13 01 06 [email protected] [email protected] www.aker-mh.com www.akerasa.com

Aker ASA annual report 2006 125 T E K

L I M Design: Haugvar Communications & Design. Translation: Flom-Jacobsen & Fish. Preparation and Print: Kampen Grafisk AS Lisensnr. 241 625 Grafisk AS Lisensnr. and Print: Kampen & Fish. Preparation Flom-Jacobsen & Design. Translation: Communications Design: Haugvar